Misconception: A Durable Power of Attorney Survives Death
All powers of attorney terminate on death. So it follows that once a person has passed away the authority granted to the agent under the power of attorney terminates.
The difference between a regular power of attorney and a durable power of attorney revolves around incapacity. Regular types of power of attorneys all terminate on death or incapacity – meaning that the agent can engage in legal business on behalf of the principal until the principal dies or is mentally incompetent to act on their own behalf. Once either of those events happens, the power of attorney is no longer valid. This general power of attorney might be useful if the principal is out of the country or otherwise indisposed.
A durable power of attorney, on the other hand, can survive mental incapacity (but not death). A durable power of attorney allows the agent to continue to act on the principal’s behalf even if the principal is mentally incompetent.
Misconception: You Can Sign a Power of Attorney if You Are Legally Incompetent
You can only sign a power of attorney if you are legally competent. In the event an individual is incompetent that individual lacks the capacity to sign a power of attorney.
Misconception: A Power of Attorney Grants the Agent the Right to Do What They Please with Your Assets
The agent under a power of attorney always has an overriding obligation, commonly known as a fiduciary obligation, to make decisions that are in the best interests of the principal (the person who named the agent under the power of attorney).
Just because a power of attorney grants the agent a power it doesn’t mean they have can do whatever they want. Legally your agent shouldn’t do something that is not in your best interests – that is their fiduciary obligation to you as your agent. Therefore, it is imperative that you choose someone you trust to be your agent.
Misconception: You Can Find a Power of Attorney Document on the Internet
Although you can find a power of attorney on the internet, it is not advisable. A power of attorney you find on the internet may lack important legal references or fail to meet the legal requirements of your state, may not adequately address your particular situation, or maybe too ambiguous.
Misconception: There is One Standard Power of Attorney
Generally, powers of attorney can be one of the following:
A general power of attorney which governs all powers covered by a power of attorney (like buying or selling property or otherwise managing one’s assets). The agent needs to check the power of attorney document to see if the necessary powers have been granted. When considering a general power of attorney, the principal should also consider if it should be a durable power of attorney, meaning it survives the incapacitation of the principal.
A limited or special power of attorney which refers to less than all powers. For example, a power of attorney could be drafted which only grants the power to conduct a real estate sale for the title of one property.
A springing power of attorney which means it springs into effect upon the occurrence of an event such as incapacity. A springing power of attorney requires a certification from the principal’s doctor certifying to the fact that the principal is no longer able to handle his or her affairs and as such the power of attorney is effective.