Power of Attorney
What is a power of attorney? A power of attorney is a document in which a person appoints someone else to handle some or all of their responsibilities such as paying bills, banking, selling property and entering into agreements. The “principal” is the person making the appointment.The person appointed by the principal is called the agent or “attorney-in-fact”.
The agent has a legal responsibility to the principal. This means that the agent must act with faithfulness and care by exercising the powers for the benefit of the principal, using reasonable caution and prudence and keeping records and receipts.
A power of attorney gives your “agent” authority so that the agent can do almost any kind of transaction on behalf of the principal.For this reason the individual who you choose as your agent is of extreme importance. Your choice of a competent agent should be someone who is extremely honest, keeps good records and is aware of their obligations. Normally this person would be your spouse or another trusted family member or friend. Remember, your attorney in fact can pay bills, deposit checks, handle taxes, sell stocks, invest in securities and do all things that you normally would do so be very careful who you choose as your agent. You can revoke this power at any time as long as you’re competent, but a power of attorney should only be put into the hands of a an extremely trusted person.
Without a power of attorney and in the event of incapacity, you may have to rely on a court appointed guardian to conduct your business. It would be necessary to apply to the Massachusetts Probate Court to have a guardian or conservator appointed to make decisions for you when you are disabled. This process is expensive and time-consuming. Not to mention that the court may appoint a total stranger to oversee your affairs. A power of attorney allows you to carry on your affairs when you are unable and is a greatlegal device for those forward thinking enough to get one in place.
A durable power of attorney is a document which allows a trusted person to manage your financial affairs and make decisions for you should you become incapacitated or terminally ill. The document is called “durable” because the document continues to be effective even should a person become incompetent after executing it. Note that not all people use powers of attorney to plan for a potential disability. Powers of attorney can be used to give someone authority to make decisions on behalf of a person while that person is still able to make decisions for themselves. For instance a person selling a piece of real estate may not be able to attend a real estate closing because of distance or some other pressing matter. A power of attorney could be used to give another person the ability to attend the real estate closing and sign documents.
In order to make a Durable Power of Attorney in Massachusetts, a person must be 18 years old, of sound mind, and under no constraint or undue influence. What is sound mind? A person 18 or over can only sign a power of attorney if they understand the implications of what they are signing. If the adult cannot understand the implications of what they are doing, for instance the person is suffering under a mental incapacity, then that person would not be able to execute a power of attorney. A person laboring under amental incapacity or developmental disability may need to have a guardian or conservator appointed.
Please contact Attorney Rob McCarthy to schedule a consultation regarding any matter concerning a power of attorney.