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The requirements and processes for creating a Power of Attorney can vary significantly by state. Some states might require the document to be notarized or witnessed, while others may have specific stipulations about who can serve as an agent. Likewise, living trust requirements differ across states. Some states might require specific language or additional documentation.
Choose your state below to learn about the specific rules and procedures.
A General Power of Attorney (POA) is a type of legal document that allows an individual, referred to as the principal, to grant broad authority to another person, known as the agent or attorney-in-fact. This authority allows the agent to conduct a wide range of personal business and financial transactions on behalf of the principal.
The agent acting under a General Power of Attorney may have the authority to perform tasks such as:
However, it’s essential to note that the General Power of Attorney is not “durable,” which means it becomes ineffective if the principal becomes incapacitated or mentally incompetent. If the principal wants the POA to remain in effect after they are incapable of making decisions, they would need a Durable Power of Attorney instead.
Also, a General Power of Attorney ends automatically when the principal dies, revokes the POA, or, in some cases, when a specific date mentioned in the POA is reached.
A Limited Power of Attorney, also known as a Special Power of Attorney, is a legal document that grants the appointed agent or attorney-in-fact the power to act on behalf of the principal, but only in specific circumstances that are outlined in the document itself.
The scope of the agent’s authority is confined to particular situations, tasks, or transactions. For example, a principal could create a Limited Power of Attorney allowing the agent to handle the sale of a specific property, manage specific assets, or represent them in certain legal matters.
Once the specific task or transaction is completed, or once the circumstances change as stipulated in the document (for example, a certain date is reached), the Limited Power of Attorney usually ends.
Just like a General Power of Attorney, a Limited Power of Attorney also becomes invalid if the principal becomes incapacitated, unless the document is made “durable.” A Durable Power of Attorney remains in effect even if the principal becomes unable to make decisions on their own.
It’s crucial that the principal carefully outlines the extent of the agent’s power in the document to avoid any potential confusion or misuse of authority in the future.
A Durable Power of Attorney is a type of legal document that gives someone, referred to as the agent or attorney-in-fact, the authority to act on behalf of another person, called the principal, even if the principal becomes incapacitated or mentally incompetent.
The “durability” of the Power of Attorney refers to its continued effectiveness even after the principal is unable to make decisions for themselves. This is a crucial difference from a general or limited Power of Attorney, which becomes invalid once the principal is deemed incapacitated.
A Durable Power of Attorney can cover a broad range of powers, including financial, legal, and healthcare decisions, depending on how the document is drafted. The principal can specify exactly what powers the agent has, and these can be as broad or as narrow as the principal desires.
Like all Powers of Attorney, a Durable Power of Attorney ends when the principal dies. It can also be revoked by the principal at any time, as long as the principal is mentally competent.
Having a Durable Power of Attorney in place is a key part of many people’s estate planning, as it ensures that there is someone trusted and authorized to handle the principal’s affairs if they are unable to do so themselves.
A Medical Power of Attorney (also known as a healthcare power of attorney, health care proxy, or durable power of attorney for health care) is a type of legal document that allows an individual (the principal) to appoint someone they trust (the agent or attorney-in-fact) to make healthcare decisions on their behalf when they are incapable of doing so.
This incapacity could arise from various circumstances, such as unconsciousness, mental impairment due to disease or injury, or any other condition that leaves the principal unable to make informed healthcare decisions.
The appointed agent can make a wide range of decisions, which may include consenting, refusing, or withdrawing treatment and making decisions about end-of-life care. However, it’s important to note that the exact powers given to the agent can vary based on the specifics of the legal document and the state laws where it’s enacted.
Before the agent can start making decisions, a physician usually must certify that the principal is incapable of making their own medical decisions. Also, the principal can typically outline specific wishes and guidelines in the document to help guide the agent’s decisions.
A Living Trust is a financial tool that lets you plan, organize, and protect your life. It’s a personal entity that allows you to add assets and plan out your inheritance. Eliminating legal battles, cost, and time spent by your loved ones.
Think of it like a personal LLC that you put everything you own in. Except it doesn’t protect you from liability like an LLC does, it protects you from probate and conservatorship.
Probate is the complicated court process (12-18 months) where a judge decides what happens to your assets after you die, become incapacitated, or are “deemed” incapable. Creating a living trust allows your assets to completely circumvent probate and immediately transfer to your loved ones.
In addition to being able to name heirs (your beneficiaries), a Trust also allows you to assign someone to manage it (your successor trustee). Instead of going through probate, your Successor Trustee takes control of the Trust, handles your affairs, and distributes your assets according to your instructions. The person you select as Successor Trustee should be your most trusted person. Like a best friend or closest family member.
At Dynasty, we believe everyone should have a Living Trust. If you have children, assets, or plan to acquire assets in the future, you should create a Trust. That way when you buy your next home, open a bank or brokerage account, get startup shares, etc. – you can immediately title them in your trust.