What is a power of attorney?
In Oregon, "power of attorney" usually means a durable financial power of attorney. When you sign a durable financial power of attorney, you authorize someone else (called the agent or the attorney-in-fact) to manage your finances and to conduct business for you. A durable financial power of attorney does not include the authority to make medical decisions. If you want to authorize someone to make health care decisions for you, you should sign an advance directive for health care.
What powers does the agent have?
The durable financial power of attorney lists the authority that you are giving to your agent. A general power of attorney gives your agent the authority to take a wide range of actions for your benefit, such as buying and selling property, paying bills, making investments, and managing bank accounts. A power of attorney may be limited. For example, you could give your agent the authority to sign on one bank account. Most of the forms that you can buy or download are for general powers of attorney. However, the standard forms may not include powers that are important for your situation, such as the power to transfer assets to your spouse if you become ill and need Medicaid assistance or the power to pay family members who provide care. The attorneys at The Elder Law Firm prepare custom powers of attorney that reflect the client's wishes and fit their circumstances, either as separate documents or as part of estate plans.
Who will be the agent?
You choose the agent, who is usually a family member or a trusted friend. You can also name alternate agents to serve in case the first agent is not able to or willing to act.
How long does a power of attorney last?
A power of attorney usually becomes effective when you sign it. In 2009, the Oregon legislature changed the law to allow a person to sign a power of attorney that becomes effective at some point in the future, such as when the person who signed it becomes financially incapable. A power of attorney remains in effect during your lifetime unless you revoke it or unless there are specific limits in the power of attorney. In Oregon, a power of attorney is durable, which means that it continues to be effective if you become financially incapable. The agent's authority ends when you die. However, you can always revoke a power of attorney, as long as you understand what you are doing when you revoke it.
How should the agent sign papers?
Accounts, agreements, and other papers should be in the name of the principal (the person who signed the power of attorney) and specify that the person who is signing the papers is acting as the agent for the principal. Often this is done by adding the word "agent" or "attorney-in-fact" or the abbreviation "poa" after the agent's name. The agent should sign his or her own name.
What are the benefits of having a power of attorney?
If you become too ill or too disabled to make decisions about your finances and you have a power of attorney, then your agent will have the authority to assume responsibility for the areas listed in the power of attorney. If you do not have a power of attorney (and if your assets are not in a revocable living trust), someone would have to go to court and be appointed as your conservator in order to manage your finances.
Are there disadvantages to having a power of attorney?
A power of attorney is a private agreement, so you have to be able to trust the person you name as the agent. There will not be a court or a government agency watching over the agent to make sure that the agent uses your money to take care of your needs rather than spending it for his or her own benefit. A bank or a business may refuse to accept the power of attorney, and the agent may still have to go to court in order to be appointed as your conservator.