Financial Powers of Attorney: A Very Useful Tool.
Michael L. Laribee, Esq.
If you do not already have a financial power of attorney, it might be time to consider one. They are relatively simple legal documents which provide a great benefit.
A financial power of attorney is an instrument that allows one person to act for another in financial matters. The person making the document is called the principal. The person designated to act for the principal is called the attorney-in-fact. The attorney-in-fact does not need to be a lawyer. Almost anyone can be appointed. However, a principal must carefully consider their choice of attorney-in-fact since the document grants significant powers.
A power of attorney can give sweeping authority to act in any and all financial matters.
It can cover all property of the principal or it can be limited to a specific transaction such as the sale of a house. Some powers of attorneys are limited to a specific period of time. They can be very useful when someone plans to take an extended trip outside the state or if they are recovering from an illness.
Most people, however, use a power of attorney when they need assistance in handling their everyday financial affairs such as paying bills or handling their banking matters. A power of attorney can also be used when a person is not able to make decisions due to mental or physical incapacities. The document can be drafted specifically so that is not affected by the disability of the principal. This is called a durable power of attorney.
Like in any legal relationship, the parties should understand their duties and liabilities. The principal should understand that he alone will be liable for all authorized acts of the attorney-in-fact. Likewise, the attorney-in-fact should know that she will be liable to the principal or the principal's heirs for losses if she exceeds her authority or violates the terms of the document.
In the state of Ohio, the principal can always revoke a power of attorney by sending written notice to the attorney-in-fact. If the document was recorded, however, the revocation must also be recorded for effective termination.
Financial powers of attorneys can be drafted and formed to fit the particular needs of the principal. It is important to use language that complies with the current law when creating such a document. Therefore, it is recommended that the principal consults with a lawyer to discuss their specific needs.
Michael Laribee is a partner in the Medina law firm Laribee Law, LLP. This article is intended to provide general information about the law. It is not intended to give legal advice. Readers are urged to seek advice from an attorney regarding their specific issues and rights.
Need a lawyer or have legal questions? Contact Attorneys in Medina, Ohio from Laribee Law, LLP.
Related law articles:
An Agent’s Duties Under a Power of Attorney
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