A power of attorney is a legal instrument whereby one person (the principal) gives another person (his agent) the authority to act on his behalf. Depending on the type of power of attorney granted, the agent can do anything that the principal can legally do when acting for himself. This means that the agent can open financial accounts, close accounts, sell property, buy property, mortgage property and make other financial decisions. In some cases, the agent may make healthcare decisions for the principal.
An individual may choose to appoint a financial power of attorney, a medical power of attorney or a combination of both. A financial power of attorney allows the agent to make certain financial decisions for the principal while a medical power of attorney allows the agent to make healthcare decisions for the principal in the event that he is incapacitated and cannot speak for himself. The type of power of attorney you choose may be general (giving broad powers to the agent) or limited (granting only specific powers to the agent).
The Type of Power of Attorney You Choose Depends on Your Needs
When you consult with a Tulsa estate planning attorney about drafting a power of attorney, he will probably discuss two main points with you: choosing your agent and choosing the type of power of attorney you need. Choosing your agent is a very important decision because you are entrusting this person with your financial well-being and, in some cases, your health. You should choose someone that you trust to make decisions on your behalf that he or she knows you would desire in a giving situation. Most often, spouses name each other or parents will name adult children as their powers of attorney.
The type of power of attorney you choose will depend on how much control you want to give to your agent and your estate planning goals. There are three basic types of power of attorney: limited, general and durable.
Limited Power of Attorney: This type of power of attorney only authorizes an agent to do specific things for you for a specific period of time or in certain circumstances. For example, if you were unable to attend the closing of your home, you may grant a limited power of attorney to someone to act on your behalf only with regard to the real estate closing on that specific piece of real property. The limited power of attorney would terminate upon the closing of the property. If a limited power of attorney does not contain a clause that terminates the power of attorney, it automatically terminates if the principal becomes incapacitated or dies.
General Power of Attorney – This type of power of attorney is very broad and allows your agent to do whatever you can legally do in your own right. A general power of attorney is the broadest type of power of attorney and it should only be used after careful thought, consideration and consultation with a Tulsa probate attorney. Your agent can sell your property, mortgage your property, open and close financial accounts in your name — anything you can do yourself. This type of power of attorney terminates when the principal becomes incapacitated, dies or revokes the power of attorney.
Durable Power of Attorney – A durable power of attorney grants the same powers to your agent as a general power of attorney with one very important difference — a durable power of attorney does not terminate upon the incapacitation of the principal. Provided the power of attorney has the statutory language to make it a durable power of attorney, the agent will continue to act on behalf of the principal even after the principal is incapacitated and can no longer make decisions for himself. It only terminates upon the death of the principal. The statutory language that must be included in a durable power of attorney is:
- “This Power of Attorney shall not be affected by subsequent disability or incapacity of the principal, or lapse of time.” OR
- “This Power of Attorney shall become effective upon the disability or incapacity of the principal.”
Contact an Experienced Estate Planning Attorney in Tulsa to Discuss a Power of Attorney
When you need the services of an experienced estate planning attorney, call Oklahoma Will & Trust. Tulsa Probate Attorney Earl D. Lawson has the experience and knowledge to assist you with all of your estate planning and probate needs. As a skilled Tulsa estate planning attorney, Earl D. Lawson knows the advantages of protecting your estate and ensuring that your wishes are followed.
Contact an experienced Tulsa estate planning attorney today for a free consultation about the best approach to protecting your legacy. Call (918) 876-4500 to schedule your free consultation. We are conveniently located at 201 W. Fifth Street, Suite 404 in Tulsa, OK.