Why do I need a Durable Power of Attorney?
A Power of Attorney is a legal document that allows one person to give another person specific powers to act on one’s behalf. The word “durable” means that the document will remain valid even if you become legally incompetent. The person executing the document is referred to as the “principal,” while the person named to act on one’s behalf is referred to as the “agent” or “attorney-in-fact.” One example of how one may use a Power of Attorney is in the sale of real property. If a seller is unavailable to sign the deed and other closing documents on the closing date, he can give his agent the power to sign on his behalf.
When it comes to financial institutions, however, the Power of Attorney is only as good as the institution’s willingness to honor it, as they may have their own policies and requirements. For instance, when signing mortgage documents, lenders normally require a specific Power of Attorney that refers directly to the exact property that is being encumbered. In other words, with few exceptions, lenders will not honor a general Power of Attorney for a real estate transaction.
It is helpful to have a Power of Attorney in the event you are unable to handle your affairs on your own due to unavailability or inability.
Another positive thing about a Power of Attorney is that it allows for the appointment of a Health Care Representative, who can make health care decisions for you in the event you are unable to make them for yourself.
What if I don’t want my agent to have control right away?
While the Power of Attorney is effective upon its execution, you do not need to give your agent a copy of it right away. If you do, you can tell your agent that you do not want it used unless you are unable to act for yourself or are unconscious.
Will I lose control over my assets if I create a Power of Attorney?
No. You are in complete control of all your assets and property. However, your agent also has powers that coexist. Your agent is prohibited from doing anything that you do not want him to do. If the agent acted contrary to your wishes, he would be acting illegally.
Can I revoke my Power of Attorney?
Yes. If you have not given the legal document to the Attorney-in-Fact, you can revoke it by destroying it and executing a new document. The Power of Attorney has no effect unless and until it is in the hands of the designated individual or has already been given to financial institutions specifying that you want that person to act on your behalf.
Be aware, however, that simply executing a new Power of Attorney does not by itself revoke the old one. If the Power of Attorney has already been provided to a financial institution, that institution must receive a document revoking it. Said revocation must be witnessed and acknowledged in accordance with the same laws and formalities of the Power of Attorney.
If I signed a Power of Attorney in another state, is it valid in Connecticut?
Most Power of Attorney forms signed in another state will be valid in Connecticut provided it was signed with the required formalities. That is, the document must have been signed, dated and acknowledged to be your “free act and deed” and signed in accordance with the laws of the state in which it was executed.
Financial institutions must feel comfortable honoring the document and, from a practical stand point, they may have their own policies with regard to whether it will accept an out-of-state Power of Attorney.
Where should I keep my Power of Attorney?
A Power of Attorney is an important document that you want to keep in a secure place with easy access. A fire proof box in your home is ideal. Be sure that someone else knows where it is, should it be needed in the event you are unable to communicate its whereabouts.1