What is a Power of Attorney?
Powers of attorney are an extremely important part of designing a complete estate plan as they plan for your disability, incapacity, or inability to make decisions for yourself. If you were to suddenly become ill, in a car accident, or undergo a surgery, who makes financial and medical decisions for you? This question is answered by your power of attorney. That document appoints an agent that you choose to make financial or medical decisions for you.
How a Power of Attorney is Created
A power of attorney is a written document that gives power over your own affairs to a person or entity you choose. There are two primary persons that are involved in a power of attorney:
- Principal – The principal is the person giving the power to a certain person or entity (the agent) make decisions
- Agent – The agent is the person or entity given the power by the principal and authorized to make decisions on behalf of the principal. We generally recommend that you have one primary agent and at least one back up agent in case the primary agent is unwilling or unable to serve.
Under Tennessee law, for a power of attorney to be valid it must either be signed in the presence of a notary or witnessed by two disinterested parties. (A witness cannot be an agent). Once signed, the power of attorney goes into effect.
How an Agent of a Power of Attorney Is Removed
You can always remove someone as your primary agent from your power of attorney. If you wish to remove someone who currently acts as your agent under your power of attorney, you have two options. You can either revoke the power of attorney or you can create a new power of attorney. Even if you do create a new power of attorney it may be a good idea to officially revoke the old power of attorney and register a written revocation with the Register of Deeds in the county in which you reside. This revocation is especially important if you have concerns that your agent may abuse their power.
Do You Need a Power of Attorney?
Yes, it is a great idea for every adult to have a power of attorney. Powers of attorney allow you to appoint someone who you know and trust to make decisions for you and to act on your behalf. The power of attorney could step in and sign checks, pay bills, or even manage your healthcare if you are unable. We generally recommend that once someone reaches the age of 18 they create powers of attorney. This appointment allows their parents to be able to legally assist them should they need the help.
What If You Do Not Have a Power of Attorney?
If you do not have a power of attorney, you run the risk of conflict within your family over who should make decisions for you. The most common instance we see this type of conflict in Clarksville is between siblings caring for their parent. It is also common in cases of second marriages where the spouse is in conflict with the children. If these sort of conflicts arise, it is likely that your family will end up in having to petition the Montgomery County court to establish a conservatorship.
A conservatorship is an action before the court to have someone appointed by the court to manage your affairs. The individual or entity appointed by the Court to manage your assets and healthcare may not be someone who you would want or trust. Additionally, the process of appointing a conservator can be costly and very time consuming, especially if family members fight over who should be appointed. So the lesson here is if you have a basic power of attorney in place it can help avoid many of these problems because you are directing a certain person to make decisions for you.
Having More than One Agent for Each Power of Attorney
You can name more than one agent on your power of attorneys. For instance, if you wanted both of your children to have power of attorney, you can designate them as “co-agents”. Be careful about naming more than one person to be your power of attorney though. If neither party gets along or they disagree on how to handle things, there would be deadlock and a conservator may have to be appointed by the court.
Also, you can authorize any co-agents to act independently from one another or that they must act together. What this means is that if you authorize them to act independently, any one of your power of attorneys can make decisions for you by themselves. If you authorize them to act only in concert, that means that they must act together and your agents would have to agree to certain actions.
When Do Powers of Attorney End?
Generally, the power granted to the agent in a durable power of attorney ends at death. So for example, if your agent had durable power of attorney over you and then you died, that agent would be prevented from using that power of attorney under most circumstances. The power of attorney does not serve as executor and has no control over the probate process.
Clarksville Lawyer John Crow Can Help Prepare Powers of Attorneys
When you are considering putting together your estate plan do not forget about powers of attorney. Both a financial and medical power of attorney are a critical part of a well-prepared estate plan. Clarksville estate planning attorney John Crow can assist you with preparing powers of attorneys that suit your particular needs. Give us a call today at 931-218-7800 at our Clarksville office and schedule an appointment to discuss your estate planning needs.