A general power of attorney (POA) allows you to appoint a trusted individual (agent) to make financial decisions on your behalf. Durable general power of attorney is similar, except it allows your appointed agent to make decisions in the event that you become incapacitated or otherwise unable to make decisions on your own.
Working with the experienced Fairfax estate planning lawyers at Select Law Partners PLLC will take the guesswork out of creating your estate plan, including general and durable POAs. Keep reading to learn about general and durable powers of attorney, then give us a call at (855) 541-4867 to schedule your consultation.
The specific powers that are granted through a power of attorney are determined by the type of power of attorney and the language in the document, which underlines the importance of understanding the difference between a power of attorney and a durable power of attorney.
As we’ll discuss, there is also the option of a healthcare power of attorney that grants a narrow scope of authority for your designated agent to make decisions concerning certain medical treatments.
With documents that create a durable power of attorney in Fairfax, you are able to choose a trusted agent to make decisions on your behalf, should it become necessary in the future. There are limits however to what a power of attorney can accomplish, which should be considered when drafting your related agreements.
Your agent is bound to you by fiduciary duty, which means that they must act in your best interests when choosing between options. Some agents may not have the training or knowledge to do so, or they may not be interested in doing what is most beneficial to the principal. Carefully choosing your agent and drafting your agreement is essential.
While there is no formal supervision, an agent under your durable power of attorney should:
Working with the experienced Fairfax estate planning lawyers at Select Law Partners PLLC will take the guesswork out of creating your estate plan, including general and durable POAs. Keep reading to learn about general and durable powers of attorney, then give us a call at (855) 541-4867 to schedule your consultation.
Disability, not death
It’s difficult to think about, everyone knows that eventually they will pass, so an estate plan is more palatable to create. However, many people ignore the possibility that they may become disabled or incapacitated and don’t take the necessary steps to protect their assets and finances. A durable general power of attorney has significant benefits and the potential to save you substantial costs and save your family from substantial headaches and logistical problems. Without a power of attorney, court proceedings will be required to obtain a conservatorship over you with the request to manage your estate. Obtaining a conservatorship requires attorneys, can cost thousands of dollars, and can take a substantial amount of time to establish. A conservatorship will also require filing annual accounting reports of the estate, and sometimes it requires court permission to make certain financial decisions.Different types of POA
Whether you are trying to establish contingency plans of your own should you become disabled or you’re trying to help your aging relatives manage their finances, a power of attorney can be a cost-effective and efficient way to reinforce your wishes by granting specific powers to your agent.
The specific powers that are granted through a power of attorney are determined by the type of power of attorney and the language in the document, which underlines the importance of understanding the difference between a power of attorney and a durable power of attorney.
General vs. limited power of attorney
| General power of attorney | Limited power of attorney |
|
|
General vs. durable power of attorney
| General power of attorney | Durable power of attorney |
|
|
POAs are automatically durable unless stated otherwise
Under Virginia Code Sec. 64.2-1600, clarifies the various definitions related to powers of attorney in the state established through the VA Uniform Power of Attorney Act, discussed further below. Under this Code, it is clarified that “durable” means “not terminated by the principal’s incapacity.” An individual is considered “incapacitated” when the person is unable to manage property or business affairs due to:- Residing outside of the country and unable to return to the United States
- Having an impairment that affects their ability to evaluate or receive information or to make or communicate their decisions with the use of technological assistance.
Uniform Power of Attorney Act
In the US, 25 states have enacted the Uniform Power of Attorney Act, of which Virginia is included. Through the VA Uniform Power of Attorney Act, the way in which the powers of attorney apply are outlined, in addition to the necessity of explicitly making a power of attorney non-durable. The regulations of the Act apply to any agreements that concern the granting of a power to another with an interest in the subject of the power, or for the benefit of a creditor in connection with a credit transaction. The Act also applies to the power to make healthcare decisions, to exercise an individual’s voting or management rights, and the power to make arrangements for the burial or disposition of remains. State law explicitly states that “A power of attorney created under this chapter is durable unless it expressly provides that it is terminated by the incapacity of the principal.” This means that if you enter into a power of attorney agreement, or any agreement that assigns a legal power to an agent you designate under the Act, it will automatically persist even if you become incapacitated.How a POA can help you and your loved ones
A power of attorney can be of significant value to you and your loved ones at any point in your life, whether or not you have experienced an accident causing incapacitation. No matter your age or occupation, a power of attorney document will remove much of the stress associated with:- Managing your financial matters
- Managing your business
- Collecting or paying debts
- Depositing or cashing checks
- Pay expenses for health care
- Applying for public benefits
- Pressing charges on your behalf
With documents that create a durable power of attorney in Fairfax, you are able to choose a trusted agent to make decisions on your behalf, should it become necessary in the future. There are limits however to what a power of attorney can accomplish, which should be considered when drafting your related agreements.
Your agent is bound to you by fiduciary duty, which means that they must act in your best interests when choosing between options. Some agents may not have the training or knowledge to do so, or they may not be interested in doing what is most beneficial to the principal. Carefully choosing your agent and drafting your agreement is essential.
What a power of attorney cannot do
The durable power of attorney that is created grants the agent broad power over financial and/or medical decisions. However, there are things agents are not allowed to perform on behalf of the principal, including:- Acting for the agent’s personal benefit
- Making decisions after the death of the principal
- Acting outside of the principal’s fiduciary interest
- Voting on behalf of the principal
- Transferring the power of attorney to another party
Requirements for creating a POA
To protect Fairfax residents from entering into agreements when they are legally incapable of doing so, whether due to incapacitation or otherwise, the state had established requirements to create a valid power of attorney. A power of attorney document must:- Be signed by the principal or in the conscious presence of the principal by another individual directed by them to sign their name on the power of attorney
- The signature is presumed to be genuine if the signature is acknowledged by the principal in front of a notary public or other person authorized by law to take acknowledgements.
1. Mental capacity
Mental capacity is the ability to make a knowing and conscious decision. For a power of attorney agreement to be valid, the principal entering into the agreement must have the mental capacity to do so. Under Virginia Code Sec. 54.1-2983.2, all adults in the state are presumed to be capable of making informed decisions, unless they are found by a licensed physician to be incapable of making informed decisions. This determination cannot be based upon a single clinical diagnosis and requires further proof from a physician. It’s important to note that mental capacity also requires that the contract be signed in a valid, knowing, and willing manner. If a person is forced into signing a contract through threat or coercion, then mental capacity is irrelevant.2. Notarization
An additional safeguard and validating factor that protects the rights of the principal and helps to ensure that your wishes are followed as closely as possible is through notarization. Your agreement will be signed in the presence of a notary or other person with legal authority to take documents. If you are unable to physically sign the document yourself, another person present with the notary may do so on your behalf.Make sure you select a trustworthy agent
When it comes time to choose an agent to assign powers to, it is essential that you choose an individual that you trust to act on your behalf. This is because there is generally no formal oversight of the agent you choose through your power of attorney, so you must trust that they will make decisions that align with your wishes and preferences at a time when you cannot make them yourself.
While there is no formal supervision, an agent under your durable power of attorney should:
- Act solely within the bounds of the authority they have been granted
- Do their best to preserve the principal’s estate plan
- Always make decisions that are in the best interests of the principal
- Keep records and documentation of all transactions and expenditures that are made on behalf of the principal
- If someone else has been assigned a medical power of attorney, to cooperate with them to ensure that healthcare decisions are made in line with the principal’s preferences
