What Powers Can I Grant to My Attorney-in-Fact?

Real Estate, Business, Finance, and more

Whether you plan to travel to another country or you feel it’s time to get your affairs in order, there are many things to consider when creating your estate plans. Aside from choosing how you will distribute your assets, and who will represent you after you pass away, you will also need to select someone to act for you if you are unable to act for yourself, such as in the event of incapacitation.
Incapacitation can occur at any time and may be temporary or permanent. It’s not just something that you need to think about when approaching old age, it’s something that you should plan for as early as you can.
Two important questions to ask yourself are: Who will manage your business, property, or investments when you are unable to do so? And, what decisions do you want to allow them to make?
To learn more about how to select a personal representative, see Choosing Your Representatives.

What is a Power of Attorney?

A Power of Attorney document is what allows someone to make decisions on your behalf if you can’t, or do not wish to, make them for yourself. This person is referred to as your attorney-in-fact, or agent, and you may choose one to manage all of your affairs, or several to each manage different aspects of your financial life.
Depending on what powers you grant your attorney-in-fact, they will be able to sign documents, make payments, deposit money, and more in your stead.

What Types of Powers Can I Give to My Agent?

There are a variety of powers you can grant your agent. In many cases, an attorney-in-fact is granted general authority, which allows them to act as you would act if you were not incapacitated, in all financial and legal matters.
However, you can choose which powers you would like your agent to have, as well as name certain restrictions to those powers.
Here is a list of the different powers you can grant to your personal representative, and what those powers allow them to do:
Real Estate
In granting real estate powers, your attorney-in-fact may buy, sell, rent, or trade property in your name. This includes rental properties and land.
An example of a restriction on this type of power would be if you wanted to allow your representative to manage all of your properties except one. You could restrict them from selling a certain piece of land, renting out a home, or buying further property.
Business
If you grant business powers to your agent, you are allowing them to run your business and act for you as a shareholder. They will be able to make investment, employment, and budgetary decisions, as well as others. They would also represent you during any meetings or litigation matters.
A restriction on this type of power would be to limit the amount they are allowed to invest in the business, or whether or not they may hire new employees.
Finance
A personal representative with permission to act in financial matters is able to make payments, transfer funds, cash checks, and control your banking interests. This may include savings and checking accounts as well as investments such as mutual funds.
A restriction for an attorney-in-fact who has been granted financial control may be to allow them to only spend a certain amount, or to only have access to certain accounts.
Insurance
This power allows your representative to control, change, or otherwise alter your insurance policies. This can mean business, home, or life insurance, as well as an annuity.
A restriction could be to allow your attorney-in-fact to cash your annuity check, but not to change your current insurance policies.
Legal
Giving your representative the power to act in your stead for legal matters means that they will act on your behalf in any and all legal claims or litigation matters. This could include a lawsuit or a legal dispute.
A restriction may be to only represent you in current cases, but not future ones.
Family Care
This power includes managing costs for education, maintenance, and medical care for yourself and/or your loved ones.
A restriction could be to limit your representative’s responsibilities to that of your children, but not your spouse.
Living Trust
This allows your attorney-in-fact to manage any assets transferred to any living trust that you have control over.
An example of a restriction on this type of power would be to allow your representative to transfer assets to one trust that you have control over, but not another.
Employ Required Professionals
This power allows someone to hire professionals in order to care for you or your family. This could be a lawyer, a caregiver, an accountant, or any other type of professional that is required to assist you or your family.
You could restrict a representative to only hire professionals for certain matters, such as accounting, but not health care.

Other Powers Include:

  • Tax obligations
  • Government benefits
  • Retirement plans and benefits
  • To buy, sell, or exchange items
  • To provide gifts to family members or friends
  • To donate to charities

General Authority

By granting your agent general authority, you are allowing them to act on your behalf in all of the matters above, and anything else that may arise.
You do have the option to grant general authority to a personal representative while restricting some of their powers. This is sometimes the case if you have granted general authority to someone you can trust, but who doesn’t have a lot of business sense. You could allow them to make all of your other decisions, but name another individual to handle your business transactions separately.
No matter what you include, your attorney-in-fact may not make health care decisions for you (unless they are also your Health Care Representative), or transfer custody of your children.

When Can an Agent Make Decisions For Me?

There are two different types of Power of Attorney documents, and which you choose depends on your situation and preferences.
Ordinary Power of Attorney
If you choose to create an Ordinary Power of Attorney, it will only be valid so long as you, the principal, are still able to make your own decisions. It ends once you become incapacitated, or you pass away. An Ordinary Power of Attorney is ideal if you are traveling for a long period of time or if you are too busy to handle certain things and would like to allow an agent to handle them for you.
Durable Power of Attorney
A Durable Power of Attorney is valid from the point it is created, until you either revoke it or pass away. Unlike an Ordinary Power of Attorney, a Durable Power of Attorney remains valid during any periods of incapacitation, either temporary or permanent.
Ready to Name an Agent?

Choosing Your Attorney-in-Fact

The different powers that you choose to grant your personal representative(s) will depend on what your current financial, business, and real estate assets and debts look like. It’s important that you understand your current standing in any and all investments before expecting someone else to be able to act for you.
Make sure that if you would like to restrict certain actions, that they will not prohibit your agent from successfully managing your affairs. If you need to, delegate different powers to different attorneys-in-fact, but only when it makes sense.
In order to create a clear and concise Power of Attorney, talk to your agent(s) prior to naming them and keep them up-to-date on any changes to your assets and debts.
Creating a Power of Attorney document can give your family and friends direction and the power to effectively manage your affairs in the event that you either cannot, or do not wish to, make your own decisions. Thus, it is best to think seriously about your choices and who you would like to give control before delegating powers and dividing responsibility.
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