“Getting our affairs in order” is something we all want to accomplish before we fall ill or pass away, but what does that actually mean? One aspect of this process involves having a power of attorney in place. Designating someone to handle your legal and financial affairs while you’re incapacitated or upon your death is the simplest but mightiest step you can take to ensure your affairs are “in order.”
What Is a Power of Attorney?
A power of attorney (POA) grants authority to a trusted loved one to act on your behalf when you cannot do so. The trusted loved one is designated as an “agent” or “attorney-in-fact” and can be a spouse, child, sibling, or friend.
What Does a Power of Attorney Do?
With a valid POA, your agent can take any action permitted in the document. Often, your agent must present the actual document to invoke the power. For example, an agent who signs documents to buy or sell real property on your behalf must present a power of attorney to the title company.
Without specifying the type of power of attorney, a document is considered a “general” power of attorney. This gives your agent broad authority to manage your affairs. However, you can limit the agent’s powers by creating a “special” power of attorney. POAs can be durable, non-durable, or springing.
Durable Powers of Attorney
A “durable” power of attorney retains its effectiveness after you are incapacitated and can be either financial, medical, or otherwise specified. In Arkansas, a power of attorney is considered durable by default unless it expressly provides that the principal’s incapacity will terminate it.
Non-Durable Powers of Attorney
A power of attorney that doesn’t retain its effectiveness when you are incapacitated is a non-durable power of attorney. The powers of a non-durable POA are limited in scope and generally have an expiration date. A common reason you might need a non-durable POA is if you are undergoing surgery and need someone to take care of insurance paperwork or bank deposits while you’re recovering.
Springing Powers of Attorney
A springing POA takes effect when a triggering event occurs, such as when you become mentally incapacitated. A springing POA can be helpful if you are uncomfortable with creating a power of attorney while you can still manage your affairs.
On the other hand, it can be bothersome, as a springing POA requires the extra step of determining whether you are incapacitated before it takes effect. If there are any questions about lucidity or disagreement about whether you truly are incapacitated, the issue may have to get resolved in court.
How to Get a Power of Attorney?
You can create a power of attorney for a single transaction, like authorizing someone to sell your car while you’re out of town, or you can create a long-term durable power of attorney. Several online resources can help you draft a POA, but consulting an attorney will help ensure its effectiveness.
In Arkansas, a power of attorney becomes valid when the principal (or principal’s agent) signs the document and that signature is notarized. Mississippi does not have the same notary requirement, but it is still good practice to have your document notarized.
How Long Do Powers of Attorney Last?
Except for a durable or springing power of attorney, the POA will last as long as you designate it to last.
If for any reason, you want to revoke or change a power of attorney, you may do so at any time. However, in Mississippi and Arkansas, you must first provide notice. While their laws do not specify the type of notice, it helps to put the notice in writing with your name, a statement indicating your desire to revoke, details of the old power of attorney, a statement that you are of sound mind, and your signature.
What Happens If I Don’t Have a Power of Attorney?
If you don’t have a power of attorney in place and decisions need to be made, the courts will have to appoint a legal guardian for you. Appointing a guardian can be expensive and time-consuming. The court may appoint a close family member, but not until you file petitions and motions and go through a court hearing.
Hire an Estate Planner Today
You may still be wondering, How important is power of attorney? Let us guide you through the process with unparalleled attention to your needs. The Harris Law Firm, PLLC is a highly respected estate planning firm with nearly 40 years of experience guiding clients through the estate planning process. Call us today at 662-262-6336 or contact us online.