Do You Know How to Use a Durable Power of Attorney?
Have you been named as the Attorney-in-Fact or Agent of a Durable Power of Attorney? If so, it is very important that you understand the powers and duties that have been granted to you by the Principal. It is equally important that you understand how and when to use the powers granted to you by the Durable Power of Attorney. Our Virginia estate-planning attorney assists individuals in learning how to use a Durable Power of Attorney in addition to assisting individuals as they create these documents as part of their estate plan.
What are My Duties and Powers as an Attorney-in-Fact?
Our Virginia estate-planning attorney believes that a Power of Attorney (POA) should be written in clear, unambiguous language so that the Attorney-in-Fact and third parties can understand. The POA document defines the powers that the Attorney-in-Fact holds. You are only authorized to perform the acts specifically granted to you within the POA. However, there are some acts that are not permissible by law, even if the POA states that the Principal grants these powers to his Attorney-in-Fact. For instance, an Attorney-in-Fact is not permitted to assume the fiduciary duties or responsibilities that the Principal may have as a conservator or guardian for another person.
The Attorney-in-Fact cannot act as an agent for the Principal when giving testimony or providing affidavits or statements of the Principal’s personal knowledge. For the most part, the acts granted to the Attorney-in-Fact by a Durable Power of Attorney are related to the Principal’s financial matters.
An Attorney-in-Fact owes a fiduciary duty to the Principal to use standard and reasonable care when executing acts on behalf of the Principal. The Attorney-in-Fact has the responsibility of acting prudently and in the best interests of the Principal when managing the Principal’s affairs. A breach of fiduciary duty could result in civil and criminal penalties.
In some cases, an Attorney-in-Fact may need to consult a Virginia estate planning attorney to discuss whether acts are within the scope of the Power of Attorney and are consistent with the fiduciary duty owed to the Principal. An attorney may suggest consulting with or retaining financial experts to provide further guidance if the Attorney-in-Fact is managing large sums of money or valuable assets and the Attorney-in-Fact has no experience in investments and property management.
How Do I Use a Durable Power of Attorney?
First, you need to read the Power of Attorney to be clear when you may act on behalf of the Principal. A Durable Power of Attorney becomes effective when the Principal signs the document. However, some or all powers may not be authorized until a specific event, such as the incapacitation, disability, or incompetence of the Principal. If this is the case, the Power of Attorney should clearly define these events so that you and all third parties know when an Attorney-in-Fact has the power to act on behalf of the Principal.
When signing documents on behalf of the Principal, you must be clear that you are not acting on your behalf. Signing your name alone could make you personally liable. Therefore, your signature should clearly read “John Doe, by Jane Doe as his Attorney-in-Fact.” In this example, John is the Principal and Jane is his Attorney-in-Fact.
Most third parties require that you give them a copy of the Durable Power of Attorney for their records. Some parties may ask that you sign a statement or affidavit that you have authority to act for the Principal, and the authority subsequently was not revoked by the Principal. Because the Power of Attorney is a statement granting you the power to act, you may want to consult a Virginia estate planning attorney before signing any other affidavits or statements.
A third party cannot refuse to accept a lawfully executed Power of Attorney. However, the party may take a reasonable amount of time to consult with their attorney about their responsibilities and legal liabilities. If a third party refuses to accept the Power of Attorney, causes an unnecessary delay, or requires the Attorney-in-Fact to perform other acts that the Principal would not be required to perform when acting on his or her own behalf, the Attorney-in-Fact should consult a Virginia estate planning attorney.
Contact A Virginia Estate-Planning Attorney with Questions
If you are an Attorney-in-Fact, our Virginia estate-planning attorney can answer your questions and provide legal support as you execute your duties and responsibilities under a Durable Power of Attorney. Virginia estate-planning attorney Steve Thienel is dedicated to assisting clients in Virginia, Maryland, and throughout the DC Metro area. Contact Thienel Law, LLC today for assistance with your estate planning or administration needs.