About Power of Attorneys

            A Durable Power of Attorney may be the most important of all legal documents. This legal document gives another person the right to do certain things for the maker of the Power of Attorney. What those things are depends upon what the Power of Attorney says. A person giving a Power of Attorney can make it very broad or can limit the Power of Attorney to certain acts.

What can a Power of Attorney be used for?

            A Power of Attorney can be used to give another person the right to sell a car, home, or other property in the place of the maker of the Power of Attorney. A Power of Attorney might be used to allow another person to sign a contract for the maker of the Power of Attorney (the person who makes a power of attorney is called the “principal”).

            It can be used to give another person the authority to make health care decisions, do financial transactions, or sign legal documents that the principal cannot do for one reason or another. With few exceptions, Powers of Attorney can give others the right to do any legal acts that the makers of the Powers of Attorney could do themselves.

            A General Power of Attorney gives the “attorney-in-fact” (the legal name of the person who is authorized to act for the principal) very broad powers to do almost every legal act that the principal can do. When Elder Law Attorneys draft general Powers of Attorney, they still list the types of things the attorneys-in-fact can do but these powers are very broad. People often do general Powers of Attorney to plan ahead for the day when they may not be able to take care of things themselves. By doing the General Power of Attorney, they designate someone who can do these things for them.

What is a “Durable Power of Attorney”?

            Normal Powers of Attorney terminate if and when the principal becomes incompetent. Yet many people do Powers of Attorney for the sole purpose of designating someone else to act for them if they cannot act for themselves. It is precisely when persons can no longer do for themselves that a Power of Attorney is most valuable.

            To remedy this inconsistency, the law created a Durable Power of Attorney that remains effective even if a person becomes incompetent. The only thing that distinguishes a Durable Power of Attorney from a regular Power of Attorney is special wording that states that the power survives the principal’s incapacity. Even a Durable Power of Attorney, however, may be terminated under certain circumstances if court proceedings are filed. Most Powers of Attorney done today are durable.

Must a person be competent to sign a Power of Attorney?

            Yes. At the time the Power of Attorney is signed, the principal must be capable of understanding the document. Although a Power of Attorney is still valid if and when a person becomes incompetent, the principal must understand what he or she is signing at the moment of execution. That means a person can be suffering from dementia or Alzheimer’s Disease or be otherwise incompetent sometimes but so long as they have a lucid moment and are competent at the moment they sign the Power of Attorney, it is valid, even if later they don’t remember signing it. At the time it is signed, the principal must know what the Power of Attorney does, whom they are giving the Power of Attorney to, and what property may be affected by the Power of Attorney.

Who may serve as an attorney-in-fact?

            Any competent person eighteen years of age and older can serve as an attorney-in-fact. Certain financial institutions can also serve. There is no course of education that attorneys-in-fact must complete or any test that attorneys-in-fact must pass. Because a Power of Attorney is such a potentially powerful document, attorneys-in-fact should be chosen for reliability and trustworthiness. In the wrong hands, a Power of Attorney can be a license to steal. It can be a big responsibility to serve as an attorney-in-fact.

To learn more about estate planning and elder law, visit Estate and Elder Planning by David Wingate at www.davidwingate.com. For an Initial Consultation, call (301) 663-9230. We can assist you with powers of attorneys, living wills, wills, trusts, Medicaid planning, and asset protection. With office locations in Frederick, Washington, and Montgomery Counties, Maryland, we are here to provide you with peace of mind.

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