If you are incapacitated or die, who will handle your assets and financial decisions in your place? Financial powers of attorney help with that process by giving authority to another person to make decisions and manage a person’s assets if an accident or illness leads to incapacitation or death.

Your Estate comprises everything you own, so you’ll need to choose someone you trust. In most cases, people seek assistance from an experienced attorney in Estate Law to help them craft powers of attorney.

If you don’t have the power of attorney and an unfortunate incident leaves you incapacitated, your family members will have to petition the court and become your guardian. This process is lengthy and expensive. While there are three (3) vital Powers of Attorney (POA) documents, Healthcare POA, Durable Power of Attorney, and HIPPA Release, the focus of this article is specifically about the Durable Power of Attorney also known as a Financial POA.

What is Financial Power of Attorney?

Financial Power of Attorney is a record that allows an agent to make decisions on behalf of another person. The principal is the person who might need decisions made on their behalf in case of an incident where they become incapacitated. As the principal, you will create a power of attorney and choose the person to represent you, usually called an agent.

In 2018, North Carolina passed Senate Bill 569 (North Carolina Uniform Power of Attorney Act), which made substantial changes to NC laws dealing with powers of attorney. Note that the powers of attorney drafted under the old law are still valid, though for the most part they are subject to the new law.

Types of Financial Powers of Attorney in North Carolina

A Financial Power of Attorney in North Carolina can be Temporary, Special, or General. With a Temporary POA, an agent will only act in a specific time frame. A Limited or Specific POA allows an agent to act only on particular powers given by the principal. On the other hand, a Durable General POA permits the attorney-in-fact to make personal and business-related decisions. A Durable Power of Attorney is essential because it allows an agent to make decisions such as in Estate Planning on your behalf if you become incapacitated.

What Are the Requirements for a Power of Attorney?

For you to sign a power of attorney, you must be of sound mind, at least 18 years of age, and have the capacity to commit yourself to sign the POA. The principal must sign the POA, and the signature acknowledged before another person or Notary Public who can take acknowledgments per the law.

What Does Power of Attorney Allow You To Do?

You can choose a loved one or a friend you trust to manage your affairs with a Power of Attorney. Make sure you choose someone who will handle everything according to your wishes and best interests.
Here is what powers of attorney can allow you to do:

  •  Business: You can assign multiple Powers of Attorney to various people to carry out specific tasks that will ensure the smooth running of your business.
  •  Estate Planning: You can choose your loved one or an adult child who can make decisive decisions about your wealth at a time when you cannot make sound choices about your money.
  •  Military: If you are a service member, you can also use Powers of Attorney to choose a reliable person to manage your paperwork and your life back home if you get deployed overseas.
  •  Travel: You may also set up a Power of Attorney to appoint someone to handle your administrative tasks while working abroad or traveling for a considerable time.

What Does Power of Attorney Not Allow You to Do?

Even when an agent has a Power of Attorney, there are several things that an agent is not allowed to do, including:

  • Voting on behalf of a principal in an election.
  • Override or change the Last Testament or Will of the principal.
  • Transferring a Power of Attorney to a different person unless specifically listed.

Still, if an agent has medical power of attorney, they can make important health care decisions, but they still need to respect the principal’s Living Will for their end-of-life treatment wishes.

When Do You Need Power of Attorney?

Everyone 18 years of age older, should strongly consider putting a Powers of Attorney in place. You can choose an appropriate type of POA depending on your age, future life goals, mindset, and more.

Should You Hire a Lawyer for a Power of Attorney Agreement?

Although there is a basic Statutory Power of Attorney in North Carolina, you may have more specific needs than that form may provide. The designation of a POA is a big decision that needs trusted legal guidance. Consulting with an experienced attorney ensures that the agreement achieves what you want to have in place, while protecting you and your loved ones. The team at McCollum Law is here and ready to help you craft a Financial Power of Attorney as a part of your Estate Plan. Call us today or fill out our online form to schedule a consultation!