By Paul H. Grant
Some of the most common questions I receive as an estate planner revolve around power of attorneys: their efficiency, expiration, and purpose.
For example, does a power of attorney expire? As any good attorney would answer – it depends! A power of attorney (POA) is a document that gives another individual of your choosing legal authority to act in your place. Many POAs are not valid until the principle (the person who made the POA) is disabled by two doctors – this is termed a “springing” POA. Other POAs are valid immediately and remain in effect until death. Unless a POA is used for a specific purpose, like to buy a house or conduct a business transaction, most POAs do not have an ending date.
Although a POA may not legally expire, a POA can become stale. A stale POA is one that is too old in the opinion of the receiver, such as a bank, investment firm, IRA trustee, utility company, or other account holder of the principal. A stale POA creates greater administrative difficulty for the agent attempting to use it. Although the legal sufficiency is still intact, the receiver is nervous about potential changes that may have occurred over time. Additional documentation is often required to verify the POA’s authority, extending the time and interjecting hassle in expediently accomplishing the desired tasks, or worse yet, the agent becomes frustrated and abandons the task.
Is a POA necessary for me? There is no “depends” in this answer – absolutely! Every individual over the age of 18 should have at minimum three POAs: Financial, Health, and Durable. The financial POA should include more than just a blanket statement that the agent has the power of the principal. Often times such a broad statement is questioned by receivers. Having specific powers delineated within the document creates a more efficient and useful document. A separate health care POA should also be created. I too often see a health care POA tucked within a general financial power of attorney. This is an old template model and is insufficient to properly address the vast needs of a well developed health care POA. Lastly, a Durable POA, or an end-of-life document, should also be separately created. This document will ensure that your wishes are well communicated and carried out by your trusted relationships.
One final note concerning POAs: Washington State has a unique mental health statute that allows health providers to take directions from a POA agent. In the countless estate plans that I have reviewed I have never seen mental health language incorporated into any POA! This is a huge oversight. Assisting someone who is having emotional, mental, or psychotic symptoms is virtually impossible without this language. Mental health today is far more inclusive than past definitions, and it can include assistance with Alzheimer’s, fits of rage, and other emotional needs. A mental health POA is a vital part of your POA arsenal.
Having an updated POA is essential as it will assist streamline the process, conform to current laws, and reduce anxiety for all parties involved.
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Paul H. Grant, JD, LL.M of Taxation. Paul’s practice focuses on estate planning, business succession, wealth transfer, and protective trusts. His extensive work history and client-focused approach brings a practical and professional approach to his lawyering. To learn more about Paul, his family and work visit: