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The Bailey Law Firm is familiar with disability planning techniques such as powers of attorney. |
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| What is a Power of Attorney? |
| A power of attorney is a written document created by a principal and accepted and effectuated by one or more attorney(s)-in-fact. The principal is the person who is granting authority to another person to make decisions for, and on behalf of, the principal. The attorney-in-fact is the person who is granted the authority to make decisions for, and on behalf of, the principal. Multiple attorney(s)-in-fact are permitted. The principal may appoint co-attorney(s)-in-fact to act jointly, or the principal may appoint a primary and a secondary or alternate attorney-in-fact to act in successive order. |
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| What is a |
A power of attorney can either be durable or non-durable. Authority under a non-durable power of attorney ceases upon the disability or incapacity of the principal. Authority under a durable power of attorney continues after the disability or incapacity of the principal.
To be effective, a durable power of attorney must be in writing and must contain a "Durability" Clause. The Durability Clause should read: "This power of attorney shall not be affected by the subsequent disability or incapacity of the principal." |
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| When is a Power of Attorney Effective? |
| Two classifications of powers of attorney exist based on the effective date of the authority of the attorney-in-fact. An immediate power of attorney establishes the effective date as the date of execution by the principal. A springing power of attorney establishes the effective date as the date on which the principal is determined to be incapacitated under the terms of the power of attorney. |
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| What is a |
| Two types of powers of attorney exist based on the scope of authority of the attorney-in-fact. A general power of attorney grants the attorney-in-fact broad powers with no to few limitations. A special power of attorney limits the authority of the attorney-in-fact based on duration and/or powers. For example, a special power of attorney may limit the scope of authority to a certain time period such as one year or to specific acts such as the sale of real property. |
