What's a Power of Attorney?
A Power of Attorney is a legal instrument that is used to delegate legal authority to another. The person who signs (executes) a Power of Attorney is called the Principal. The power of Attorney gives legal authority to another person (called an Agent or Attorney-in-Fact) to make property, financial and other legal decisions for the Principal. A Principal can give an Agent broad legal authority, or very limited authority. The Power of Attorney is frequently used to help in the event of a Principal's illness or disability, or in legal transactions where the principal cannot be present to sign necessary legal documents.
Are There different types of powers of attorney?
Yes. There are "Nondurable ," "Durable," and "Springing" Power of Attorney. A "Nondurable" Power of Attorney takes effect immediately. It remains in effect until it is revoked by the Principal, or until the Principal becomes mentally incompetent or dies. A "Nondurable" Power of Attorney is often used for a specific transaction, like the closing on the sale of residence, or the handling of the Principal's financial affairs while the Principal is traveling outside of the country.
A "Durable" Power of Attorney enables the Agent to act for the Principal even after the Principal is not mentally competent or physically able to make decisions. The "Durable" Power of Attorney may be used immediately, and is effective until it is revoked by the Principal, or until the Principal's death. Law Offices of Inna Fershteyn will prepare a Durable Power of Attorney as part of your Trust and Estate Package.
When is it appropriate to use a "Durable" or "Springing" Power of Attorney?
"Durable" and "Springing" Powers of Attorney are frequently used to plan for a Principal's future incapacity or disability and loss of competence resulting, for example, from Alzheimer's Disease or a catastrophic accident. By appointing an Agent under a "Durable" or "Springing" Power of Attorney, the Principal is setting up a procedure for the management of his or her financial affairs in the event of incompetence or disability.
What kinds of legal authority can be granted with a Power of Attorney?
- Buy or sell your real estate
- Manage your property
- Conduct your banking transactions
- Invest, or not invest, your money
- Make legal claims and conduct litigation
- Attend to tax and retirement matters
- Make gifts on your behalf
Can a Power of Attorney grant an Agent the authority to make medical decisions for the Principal? No. In New York State, the proper legal instrument for delegating health-care decisions to another is called a Health Care Proxy.Health Care Proxy
Can I appoint more than one Agent in a Power of Attorney?
Yes. You may appoint multiple Agents. If you appoint two or more Agents, you must decide whether they must act together in making decisions involving your affairs, or whether each can act separately.
There are advantages and disadvantages to both forms of appointment. Requiring your Agents to act jointly can safeguard the soundness of their decisions. On the other hand, requiring agreement of all your Agents can result in delay or inaction in the event of a disagreement among them, or the unavailability of one of them to sign legal documents.
Allowing your Agents to act separately may ensure that an Agent is always available to act for you. But it may also result in confusion and disagreements if the Agents do not communicate with one another, or if one of them believes that the other is not acting in your best interests.
Once I sign a Power of Attorney, may I continue to make legal and financial decisions for myself?
Yes. The Agent named in a Power of Attorney is your representative, not your "boss." As long as you have the legal capacity to make decisions, you can direct your Agent to do only those things that you want done.
What are an Agent's obligations to a Principal?
The Agent is obligated to act in the best interests of the Principal, and to avoid any "self-dealing." Self-dealing is acting to further the selfish interests of the Agent, rather than the best interest of the Principal.
An Agent appointed in a Power of Attorney is a fiduciary, with strict standards of honesty, loyalty and candor to the Principal. An Agent must safeguard the Principal's property, and keep it separate from the Agent's personal property. Money should be kept in a separate bank account for the benefit of the Principal. Agents must also keep accurate financial records of their activities, and provide complete and periodic accountings for all money and property coming into their possession.
Is it possible for an Agent to steal my money and property?
Yes. A Power of Attorney can be abused, and dishonest Agents have used Powers of Attorney to transfer the Principal's assets to themselves and others. That is why it is so important to appoint an Agent who is completely trustworthy, and to require the Agent to provide complete and periodic accountings to you or to a third party.
Can a transfer of a Principal's assets to other people be a good thing?
Yes. A Principal may want to authorize transfers or gifts property for estate planning and other valid purposes. New statutory short-form Powers of Attorney in New York State permit Agents to make gifts to members of the Principal's family, if the Principal so authorizes in the Power of Attorney. The Principal can also customize a Power of Attorney to permit the Agent to make gifts to non-family members.
What can I do if my Agent does not follow my instructions?
You may revoke your Power of Attorney at any time. You should inform your Agent, in writting, that you are revoking the Power of Attorney. Request the return of all copies of your Power of Attorney. You should notify your bank or other financial institution where your Agent has used the Power of Attorney that it has been revoked. You should file a copy of the revocation with the County Clerk if your Power of Attorney has been filed in the Clerk's office.
If you decide to revoke a Power of Attorney, it is in your best interests to consult a Law Offices of Inna Fershteyn, and arrange to have a new Power of Attorney executed.
Am I required to file a Power of Attorney in a government office?
Not unless the Power of Attorney is used in a real estate transaction. In that case, it must be files in the County Clerk's office. And when you file in the County Clerk's office, the Power of Attorney is a public record open to inspection by the public. A writing that revokes a filed Power of Attorney should also be filed in the County Clerk's office.
If you file a Power of Attorney in the County Clerk's office, you will be able to get additional "certified" copies from the County Clerk for a small fee. A certified copy is legally equivalent to the original document. It is often convenient to have certified copies of your Power of Attorney on hand.
How many copies of a Power of Attorney should I sign?
You are required to sign (execute) only one copy. However, it is not unusual for a Principal to sign several original copies. Banks and financial institutions, for example, generally require an original or a certified copy before allowing an Agent to transact business on the Principal's behalf. And banks frequently provide customers with their own Power of Attorney forms.
Law Offices of Inna Fershteyn will prepare a Power of Attorney as part of you Estate Planning package. For any specific questions regarding your power of attorney, call our office at (718)3 33-2394.
Additional Trusts and Estate Articles:
Trusts & Estate Overview
Wills v Trusts
Probate Law
Intestacy Laws
Trusts A-Z (English Version)
Types of Trusts:
Living Trusts
Revocable Trusts
Irrevocable Trusts
Special Needs Trusts
Spendthrift Trusts
Other Trust and Estate Documents:
Living Wills
Health Care Proxy
Will and Trust Glossary
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