We all carry on personal “business” in our everyday lives (e.g. paying bills, doing banking, etc.), which is what makes a financial power of attorney (also referred to as a “Power of Attorney” or a “POA”) an important document for everyone to have. A financial power of attorney allows you to appoint another individual (your “Agent”) to step into your shoes to manage your financial interests. Georgia established a new form POA in July 2018, so if you haven’t updated your POA in a few years, now’s the time!
Why have a power of attorney?
A Power of Attorney may be effective immediately and, in most cases, remain effective if you are deemed to be incapacitated (this is called a “Durable Power of Attorney”), making the POA immediately available for use for your convenience. For example, if you spend time traveling and need someone to handle financial matters at home, if you need someone to attend a real estate closing for you, if you have been diagnosed with a serious medical condition and anticipate the imminent need for assistance with your finances, or if you have a trusted adult child or another individual who regularly assists you with paying bills and other matters, a Durable Power of Attorney may make good sense for you.
Alternatively, a Power of Attorney may be drafted to take effect only in the event you are deemed to be incapacitated and unable to manage your own financial affairs (this is called a “Springing Power of Attorney”). “Incapacitated” means that you cannot manage property or business affairs because you have an impairment in the ability to receive and evaluate information or make or communicate decisions, or can also refer to certain extreme cases in which you are missing or otherwise unavailable. This incapacity may generally be determined in a manner you set forth in your power of attorney, by a physician or licensed psychologist or by a Court.
Questions about Choosing a Power of Attorney
Some people feel trepidatious about the idea of allowing another person to have immediate access to their finances, while others feel that they have no choice but to make their POAs immediately effective. Although the person you select to act as your Agent is under a fiduciary duty, or legal obligation, to act in your best interests, it is important to discuss when your POA should become effective with your Atlanta estate attorney.
Once you’ve worked out who you would like to appoint as your Agent and the appropriate effective date for your POA, you have additional decisions to make, including:
- Do you want your Agent to receive compensation for his or her service as your Agent?
- Who should serve as a successor, or backup, Agent?
- Which powers do you want to grant to your agent? (Georgia’s POA has two sections listing various powers. The “Grant of General Authority” section tends to speak to life’s everyday business while the “Grant of Specific Authority” section provides for more intrusive powers).
- Do you want your Agent to be able to make gifts on your behalf?
- Who would you like to nominate as your “Conservator,” in the event you need one to be appointed?
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All of these decisions require a clear understanding of the issues at hand and guidance about the same. Consult with an Atlanta estate attorney to guide you through the power of attorney!