FAQs Regarding Powers of Attorney
What are the general types of Powers of Attorney (POAs)?
A person needs a POA for three life situations: 1) medical decisions; 2)personal decisions, such as where and how to live; and 3) financial decisions. A person may appoint the same person or different persons as agents for the different POA documents. Usually people have two separate documents, one for the medical POA and another for the personal and financial POA.
Can I just say “I give my agent the power to make all my decisions”?
Many third parties will not accept the authority of the agent unless the POA has specific language that the third party is looking for. For example, banks want certain language from a banking statute; the IRS wants some specific language; and additional specific language is helpful for Medicaid issues.
Can I just use the POA form that my bank (or a securities broker, or asssisted living facility, etc.) gave me?
This form will probably work well for the person who gave you the form, but it is not likely to work well in other situations. It is more efficient to have a comprehensive POA which is designed for your particular circumstances, and which will be effective for use with anyone.
What if I don’t have anyone I can totally trust with my financial matters?
In this case, you will want to consider imposing some limitations on your agent. You might also require the agent to send a basic accounting to a trusted advisor to review on a regular basis. The specifics can be discussed with your attorney and then detailed in your POA.
Can I name more than one person as my agent?
Most people name one person, and choose a second person as an alternate agent in case the first person is unable or unwilling to act as agent. Some people choose to name multiple agents, and these agents then have to make decisions together and sign papers together. For example, some parents will designate two or more of their children as agents. Multiple agents can be cumbersome and can result in needless waste of time. However, you can name multiple persons as agents and then specify in the POA that you allow them to divide the work between themselves and act independently. This arrangement allows more than one person to share the burden and responsibilities.
Can my agent give my property to herself or others?
The general rule by statute in Washington is that an agent cannot make gifts. All of your property must be preserved for you. However, you can override the statute by specifying in your POA that you allow your agent to make gifts. Usually people who allow their agent to gift property will impose limitations on gifts.
Can I still make my own decisions after I sign a POA?
The POA can be drawn so that it is effective only if you become incompetent. Alternatively, the POA can become effective immediately upon signing. Depending on your individual circumstances, it may make sense for the POA to become effective (either fully or partially) immediately. For example, this may be appropriate if you presently are competent but you need help from your agent with some aspects of your life, such as banking, investments, medical decisions, etc.
Do other people, such as bankers or brokers, have to honor my POA?
Your agent may have to deal with some people who will not want to honor your POA. It is a good idea to contact those people while you are still competent, as they may have a particular POA form that they want you to sign. Signing these form POAs becomes more important if you may be close to becoming incompetent.
How can I figure out which options and details should be in my POA?
Although the many options and choices may seem overwhelming, for most people making a POA is not that time-consuming. An experienced attorney can provide guidance and suggest appropriate provisions after learning more about your circumstances.
This information is general in nature and should not be relied upon for your specific circumstances. For information, questions, or comments, please contact Douglas J. Engel or Kathryn S. Kumar.