What is Power of Attorney?
You may have heard the phrase “power of attorney” before, but do you know what it means? Understanding this key legal document is important, since most people could benefit from one at some point in their lives.
A power of attorney is a legal document that you can use to give someone else the authority to take specific actions on your behalf, such as performing certain financial transactions, making health care decisions, or signing a contract. If you are the signer of the power of attorney, you are referred to as the “principal” or “grantor;” the person you are giving authority to is called your “agent.” The agent is legally obligated to make decisions that are in the best interest of the principal.
At AZ Statewide Paralegal, we specialize in the creation of legal documents, including powers of attorney, in Arizona. Contact our office in Tucson, Phoenix, or Mesa today so that we can walk you through the legal document preparation services we offer.
Requirements for a Health Care Power of Attorney
A health care power of attorney is only valid if the principal has the mental capacity to make legal decisions at the time the document is signed. A power of attorney is also only valid if the authority it assigns is an authority the principal legally has.
Further, a health care power of attorney does not override any obligations for the principal to take action himself or herself; for example, if a bank requires depositors to appear in person to make a withdrawal, it is not obligated to accept a power of attorney assigning withdrawal authority to an agent.
Arizona law specifies additional requirements for the content, wording, and signing of powers of attorney, depending on the nature of the authority being granted.
The Duration of the Authority Granted by the Health Care Power of Attorney
Some powers of attorney, called “durable powers of attorney,” remain in effect even if the principal becomes incapacitated, such as by Alzheimer’s Disease, dementia, or physical or cognitive impairment due to an injury or illness.
If a power of attorney does not explicitly state that the power is durable, the authority it grants ends if the principal becomes incapacitated. Also, unless a power of attorney specifies either that it is durable or that it expires on a particular date, it may automatically expire after a certain period of time. Finally, the principal may revoke a power of attorney at any time, provided s/he has the necessary mental capacity.
In all cases, a power of attorney expires upon the death of the principal.
A common misconception about powers of attorney is that once you sign one you have “signed away” your ability to make decisions yourself. This is not true. As long as you, as the principal, have the necessary mental capacity to make decisions, you can continue to do so.
If a person becomes incapacitated and does not have a durable power of attorney in effect, a court would have to grant a guardianship or conservatorship in order for another person to be able to make decisions on their behalf. Guardianship grants authority to an agent to make decisions regarding the ward’s person; conservatorship grants authority to an agent to make decisions regarding the ward’s assets.
Types of Power of Attorney
Let’s take a look at some of the common types of power of attorney. Although a power of attorney can be drafted to grant an agent any authority that the principal has, the most common types of power of attorney grant the agent medical, financial, or contractual authority.
A health care power of attorney allows the agent to make medical decisions for the principal in case of serious illness or injury, when the principal is unable to make his or her wishes known. It includes the authority to make end-of-life decisions, such as whether to terminate life support. A health care power of attorney is often accompanied by a “living will” or “advance health care directive,” which is a statement of the signer’s medical and end-of-life wishes.
A health care power of attorney can also be enacted specifically for mental health care.
A health care power of attorney is almost always durable and only comes into effect when the principal is incapacitated. After all, a coherent person generally wants to make his or her own medical decisions! However, a non-durable medical power of attorney can be used when parents wish to give another adult the temporary authority to make medical decisions for their child, such as if the child will be visiting relatives for an extended period and the parents would not be available in the event medical care is needed.
Powers of attorney for financial matters may be durable or temporary. A durable power of attorney granting the authority to conduct financial transactions will often specify that it only comes into effect when the principal is incapacitated, though it may also be immediately effective.
Also, financial powers of attorney may be very general, giving the agent broad decision-making authority, or specify only limited authority for the agent. For example, a power of attorney could grant the agent only the authority to sign checks against a specified bank account owned by the principal.
Also, a durable power of attorney granting the authority to conduct financial transactions may be effective immediately or only when the principal is incapacitated.
A third common use for a power of attorney is to grant the authority to sign contracts, such as real estate contracts. For example, one spouse might enact a power of attorney to grant the other spouse the authority to sign a real estate contract if s/he is unable to be present to sign the documents in person.
Power of attorney is a flexible and useful tool. To protect the interests of the principal, a power of attorney also has many legal requirements in order to be valid. Depending on the purpose of the power of attorney, it may require certain language or accompanying documents in order to be valid or to function the way it was intended to.
At AZ Statewide Paralegal, we have offered professional legal document preparation services in Arizona for decades. We know how to properly prepare a power of attorney to protect your interests and wishes. By using our service you can avoid the expense of a high priced attorney. There is no need to worry about deadlines and properly completing the forms. We know what to ask and provide this service to hundreds of clients each year.
We offer individual power of attorney preparation (including the required HIPPA release for health care powers of attorney). We also offer a complete trust package that includes a health care power of attorney, living will, and durable power of attorney in addition to:
- A revocable trust
- A “pour over” will
- Procedure at death instructions
- Affidavit of Trust Existence
- Quit claim deeds for real estate (maximum of 4)
- Assignments for personal property
In addition, for cases where an individual who did not establish power of attorney becomes incapacitated, we offer guardianship and conservatorship document preparation services as well. Contact our office in Tucson, Phoenix, or Mesa today so that we can walk you through the legal document preparation services we offer.