Will - Updating Will - Invalid or No Will - Power of Attorney - Personal Directive
KEY CONSIDERATIONS for your POWER of ATTORNEY
Legally protect your financial and property interests while still alive, yet incapable of acting for yourself due to personal incapacity.
To schedule an appointment, contact our law firm at 403-400-4092 or Chris@NeufeldLegal.com
Given the significance of a power of attorney, which addresses financial and property-related matters, should you become incapacitated, or otherwise be unable to make decisions for yourself, it is important that your power of attorney is drafted to reflect your intentions and preferences, with a particular emphasis being placed on a number of key considerations, including:
A. Choosing the Right Agent
The person you name to act on your behalf is called your Agent (or "attorney-in-fact"). This is arguably the most crucial decision.
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Trust and Integrity: Your Agent will have the authority to manage your money, pay your bills, sell property, and access your accounts. They must be someone you trust implicitly to act honestly and solely in your best interest.
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Competence: They should be organized, financially savvy, and capable of handling administrative tasks like record-keeping and communicating with banks or tax professionals.
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Availability: Choose someone who is geographically close enough or has the time and willingness to manage your affairs if needed.
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Succession: Always name one or more Successor Agents in case your primary Agent is unable, unwilling, or dies before you.
B. When the POA Becomes Effective
This addresses when your Agent can start acting for you.
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Immediate (Non-Durable): The Power of Attorney takes effect immediately upon signing. This is common for convenience, like allowing an Agent to handle a specific transaction while you are out of the country. A standard Power of Attorney loses its power if you become incapacitated.
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Immediate (Durable): The Power of Attorney takes effect immediately and remains in effect even if you become incapacitated. For financial planning, this is the most common and recommended choice as its primary purpose is to protect you if you can no longer manage your own affairs.
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Springing: The Power of Attorney only "springs" into effect upon a specific future event, typically your incapacitation. This can sound appealing but can cause delays and complications, as it often requires a doctor's certification to legally prove you are incapacitated, which banks and institutions may challenge.
C. The Scope of Powers
You must define exactly what your Agent is allowed to do. You can grant broad, general powers or limit them to specific, narrow actions.
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General Powers: These typically include the authority to:
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Manage bank accounts (deposits, withdrawals, check writing).
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Pay bills, taxes, and insurance premiums.
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Manage real estate (sell, buy, rent).
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Handle retirement accounts and investments.
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Specific (Hot) Powers: Most jurisdictions require you to expressly and separately authorize certain significant actions, often called "hot powers." These include:
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Gifting: The Agent's ability to give your money or property away, which must be clearly defined.
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Changing Beneficiaries: Altering the beneficiaries on life insurance or retirement accounts.
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Creating, Modifying, or Revoking a Trust.
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Self-Dealing: The Agent's ability to sell assets to themselves. This is often not advised unless very strict guidelines are in place.
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D. Record-Keeping and Accountability
While your Agent acts in your best interest, they should also be accountable.
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Reporting: Consider including language that requires the Agent to provide periodic statements or records to you, a Successor Agent, or another family member.
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Compensation: You should clearly state whether the Agent is entitled to be paid for their time (and if so, how much) or only reimbursed for out-of-pocket expenses.
Whether you are looking to have a power of attorney for finances created or require legal representation in the implementation of an incapacitated person’s power of attorney, contact our law firm today at 403-400-4092 or via email at Chris@NeufeldLegal.com to schedule a confidential initial consultation.
IMPORTANT NOTE: This website is designed for general informational purposes. The site is not designed to answer specific questions about your individual situation or entitlement. Do not rely upon the information provided on this website as legal advice in respect of your individual situation nor use it as substitute for individual legal advice. If you want specific legal advice, you need to engage a lawyer under established legal engagement procedures that have been specifically agreed to by that lawyer.
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