A power of attorney is a legal document wherein one person (the principal) appoints another person or organization to act as an agent on his or her behalf. The principal delegates his authority to the agent to perform certain acts or functions on his behalf.
The person or organization you appoint is referred to as an "Attorney-in-Fact" or "Agent."
Purpose of Power of Attorney
A power of attorney enables a principal's affairs to be managed by a person of their choice when they are unable to conduct them personally, such as if they are ill, travelling overseas or become mentally incapacitated.
A power of attorney will usually end either at a specified time or upon the request of the principal at any time using a deed of revocation and will automatically be revoked if the donor loses mental capacity. We will come to revocation shortly.
In What Situations General Power Of Attorney Applies?
You have to decide one or more of the following tasks that your attorney-in-fact will carry out on your behalf from time to time:
- manage your properties
- preparing and filing income tax returns
- making decisions regarding health care
- do transactions at the bank and pay your bills
- handle your retirement and insurance benefits
- collect your social security benefits
- handle your legal claims
You have two options when deciding how much authority you are going to allow to your agent.
You can give either general or a limited power. The right choice depends on your needs and preferences when it comes to managing your affairs.
A "limited" power of attorney grants an agent the authority to act for the principal in a particular matter or during a specific time period. With a limited power of attorney, an agent would not have any more authority to act for the principal than what is stated in the document.
A general power of attorney usually grants an agent broader authority to act on behalf of the principal. For example, a general power of attorney form can grant an agent the authority to endorse checks and other instruments payable to the principal, pay bills and borrow money on behalf of the principal, and provide the agent with access to the principal's safe deposit box.
Powers of Agent/Attorney
These powers usually include:
Handling banking transactions
Entering safety deposit boxes
Handling transactions involving U.S. securities
Buying and selling property
Purchasing life insurance
Entering into contracts
Exercising stock rights
Buying, managing or selling real estate
Filing tax returns
Handling matters related to government benefits
You also have the option to grant the following additional powers to your Agent:
Maintaining and operating business interests
Employing professional assistance
Making transfers to revocable ("living") trusts
Disclaiming interests (this has to do with estate planning strategies to avoid estate taxes)
So if you would like to know how Net Lawman can help you create easy to understand and legally binding business documents or need any legal information about power of attorney contact us direct and speak to one of our expert advisors. Alternatively, browse our website to find out more about our range of services and document templates.
Can Principal Limit Attorney’s Powers?
A principal can limit or place conditions on how he wants his attorney/s to carry out their responsibilities. For example, manage the principal’s financial affairs generally while they are abroad, until a given date
If principal does not specify any limits, his attorney will be able to make any financial or legal decisions on his behalf until the appointment is changed or cancelled, or he loses capacity.
Deciding Who to Appoint
You need to make this decision for yourself. You can choose any adult to be your agent. You should try to appoint someone who you have grounds for believing is trustworthy and who both knows you well enough, and is objective enough, to make the decisions that are best for you.
Appointing more than one decision-maker can help you get a balanced outcome.
However, on the other hand, if you appoint them jointly and they cannot come to an agreement about what to do then a decision cannot be made.
Registering A Power Of Attorney
A Power of Attorney must be registered before it becomes effective.
Once I Have Created a Power of Attorney Can I Still Act on My Own Behalf?
Yes. The power of attorney gives your agent the legal right to act on your behalf. However, it does not remove the power for you to act for yourself.
Duration Of A Power Of Attorney
A power of attorney remains in force until:
it is revoked;
it is terminated by the death, bankruptcy or insolvency of the; or
the purpose or time for which it was created has been fulfilled or has passed.
Mental Competence and Validity of Power of Attorney
In order for a power of attorney document to be valid, you must be mentally competent when you sign it. This means that you must understand the powers that you are granting to your Agent and the implications of having someone else make decisions for you. If there is any question about your mental competence, it's a good idea to have a physician evaluate you and state in writing that you are competent.
Remember that regardless of the period stated on the contract, the power of attorney will be void once the principal dies. However, when the principal fell ill, become physically or mentally incapacitated, some legal power of attorney agreements are honored provided that they have the provision that the contract will still be valid when these things happen. Otherwise, they will also become void.
It is also assumed that the agent will be completely honest and truthful with his business dealing in representing the donor. When the attorney/agent is proven to be dishonest and fraudulent, all the things that he has signed – when the power of attorney is still in effect – will be deemed invalid.
Revocation of Power of Attorney
Revocation of power of attorney is a legal document signed by principal. It states that the principal is canceling the powers that were given to the attorney in an earlier power of attorney. The document provides written confirmation that the principal has revoked the power of attorney that was previously granted.
Why Revoke a Power of Attorney
Some reasons include:
The power of attorney is no longer necessary as you are now able to act on your own behalf;
You no longer trust your attorney;
You have found a more suitable candidate to act as your attorney;
It is no longer practical to have your attorney acting on your behalf (e.g. your attorney no longer resides in the same jurisdiction as you do); and
The purpose of the power of attorney has been fulfilled and you no longer need an attorney to act for you.
Deed of Revocation of Power of Attorney
A revocation of a power of attorney is not effective against the attorney or any third party (e.g. bank) until notice of the revocation has been received by that party. Consequently, it is a good idea to have a written document as evidence of your revocation to make sure there is no doubt as to your intention to revoke the power.
A power of attorney can be revoked at any time. And you are not required to explain why you are revoking your power of attorney.
Effective Revocation of Power of Attorney
Upon the signing of the Deed of Revocation, a witness shall be required to counter sign the Deed to confirm that you are the correct person and that you have chosen to revoke the power of attorney that is in place. The Deed of Revocation document and copies of such must be given to the attorney and any third parties who are involved in the matter. We recommend that you make copies for this purpose to ensure the original is kept safe and cannot be misplaced.
Legal power of attorney
Will or Testament is a legal instrument whereby a person (testator) creates in order to make decisions on how his or her estate (which may include both personal and real property) will be managed and distributed after his or her death.
legal will and power of attorney has a close relationship. Whenever a testator creates a Will, he definitely requires a person to enforce his Will according to his wishes. Therefore, executor works in the same way as an agent work in power of attorney document,.
Who are Executors
Executors are the people who will be responsible for carrying out your wishes and for sorting out the estate. They will have to collect together all the assets of the estate, deal with all the paperwork and pay all the debts, taxes, funeral and administration costs out of money in the estate. They will need to pay out the gifts and transfer any property to beneficiaries.
Importance of Will
This is a bullet-point summary of reasons:-
You choose your own executor to carry out your wishes
You appoint a guardian for your minor children and children yet unborn (Especially for a mother to appoint a father who does not already have parental responsibility. For further information click here
You decide who is to inherit your property and (sometimes) at what age
You avoid an intestacy and rules which can send your property in unexpected directions (even to the government)
A will can provide flexibility and cost control in administering your estate
(Sometimes) opportunities to minimise inheritance tax
Avoids much uncertainty and anxiety and drawn-out procedure for your family
Enjoy peace of mind!
Revocation of Will
Testator can revoke a Will anytime in his lifetime, and can create a new one. As in case of power of attorney, revocation must be brought in the attention of the executor.
It is always advisable that a new Will should contain a clause revoking all previous will forms Revoking a Will means that the Will is no longer legally valid.
Net Lawman’s Power of Attorney and Legal Will Forms
Net Lawman has various templates of power of attorney and legal will. We also have forms to revoke a legal power of attorney, whereby you will have ease of mind and can simply use our template to revoke an existing power of attorney.
The Deed of Revocation document is a template that can be easily and fully edited to ensure it meets your requirements. The template has been drafted by our team of Solicitors and Barrister for reliability.
Our templates have been designed to protect your legal rights when you need to hand over power of attorney to another or to create a legal will You can customize the template according to your own wishes. The legal documents available for download is written by expert team of Solicitors and Barristers to ensure your rights are being protected.
Our templates have been designed to be used in New Zealand, and are regularly updated to comply with domestic legislation.