Powers of Attorney – How Can They Be Used?
Many times, situations arise where an individual is unavailable or unable to complete a task that requires an in-person appearance. In such situations it is common for that individual to give another the power of attorney. Attorney King has ample experience drawing up and assuring such agreements are carried out.
When is this power created?
A power of attorney is created when an agreement is created whereby one person (called the principal or grantor) provides another person (called the attorney-in-fact or agent) with the explicit authority to act on behalf of the person authorizing such power. The type of relationship, including the length and scope, can be decided upon by the parties. The person to whom the power is given may be referred to as the “attorney-in-fact”, even though this person does not have to be an attorney. In general, any competent adult may be named as an agent or attorney-in-fact.
What types of relationships are available?
There are different types of power of attorney relationships.
- Limited power of attorney, only allows the agent to perform specific acts on behalf of the individual. Examples of such a relationship would include situations where a person would allow the agent to stand in their place at a closing on a piece or real estate, or allowing access to finances to pay bills on the individual’s behalf.
- General power of attorney, allows the agent to perform all tasks on behalf of the person as if he/she, independently, was completing the task.
- Durable power of attorney, allows the agent to retain the power given by the principal even if he/she becomes disabled. Certain words must be written into the agreement to effectuate this type of power. The words must show that the individual intends to have the power survive his/her disability.
What is the principal and what does he/she have to do?
The principal (the person granting the power) must be competent when the powers are granted. Thereafter, the principal may revoke the powers granted at any time.
The powers granted need to be carefully tailored to the intent of the principal, which is why an attorney should be consulted for drafting purposes.
What is an agent or attorney-in-fact, and what does he/she do?
An individual who is given the power of attorney is deemed the agent or attorney-in-fact. The person who holds the power can perform all acts within the executed power of attorney provisions. So long as the acts are in accordance with such provisions, they are non-reviewable by courts and do not require any further permission.
A person who has been given power of attorney must always act in good faith and cannot take the position if he/she stands to gain from the relationship.
What is a special power of attorney?
There are two common situations in which a special power of attorney may be desirable:
- Financial Institutions – Banks often provide a power of attorney to grant authority over a particular account. Some banks will allow an individual to make his/her own agreement for a power of attorney while others will provide a form that is necessary to successfully grant the power.
- Tax Authorities – The IRS has its own power of attorney form (Form 2848) for cases where someone will need representation before the IRS. Massachusetts has a similar form (Form M-2848) for the Department of Revenue. As with all other power of attorney agreements, the principal must clearly state the scope of the authority that is being granted.
While it is not necessary, to assure that the power of attorney agreement is not questioned, it is good to have it signed before a public notary.
Power of Attorney Termination
A power of attorney can be terminated by revocation of the principal, death of the principal, disability (unless it is a durable power of attorney), expiration as provided in the power of attorney, or upon the occurrence of a specified event as provided in the power of attorney.
Making Sure Your Power of Attorney is Right for Your Needs and Wishes
It is important to make sure that the power of attorney agreement only contains what you want. You don’t want to find yourself in a situation where too much or too little power is given to the attorney in fact.
If you are in need of power of attorney, please call my office to schedule a meeting. Upon learning about you needs and wishes, I can draft a power of attorney to accomplish your objectives.
I would invite you to call me at (978) 851-5145 or fill out the contact form below to schedule a meeting at your convenience.
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