A durable power of attorney can be one of the most helpful estate planning tools a person uses, but it can also be very risky. A durable POA gives a person (who is called an “attorney in fact”) legal authority to act for another person in a variety of matters, including banking, benefits, housing, taxes, real estate, litigation, and more. (The durable POA is different from a Health Care Power of Attorney, which is the form used to appoint a person to make decisions about health care.)
A power of attorney can be limited or very broad in scope depending on what is needed. A properly written and executed durable POA can give someone a great deal of power over another person’s affairs, and should be carefully considered. Executing a power of attorney does not take away the ability of the principal — the person signing the power of attorney — to continue to conduct his own affairs.
When deciding who to name as "attorney in fact," consider four things about potential people:
1) Trust. The person named in a POA must be trusted to do what the principal wants and needs. The “attorney in fact” must not use his authority to take advantage of the principal and cannot exceed the authority given to him.
2) Competency. The attorney in fact must be capable of handling the tasks the principal needs done. A person who must handle a complicated tax matter needs a different level of competency than someone who needs to make sure the rent is paid each month.
3) Capacity. The needs of the principal may change over time. The attorney in fact should have the time, energy, and willingness to help the principal as different situations arise.
4) Communication. The principal and the attorney in fact should be able to communicate clearly with each other. The principal needs to give directions about what she wants done under different circumstances, and the attorney in fact should be honest about what she is willing and able to do.
Ohio’s “power of attorney” form, along with tools and resources to help fill it out, can be found here. The POA form should be signed before a notary. The POA must be given to anyone or any institutions asked to rely on it, such as a bank or landlord. The POA lasts until the principal dies or says the power of attorney is no longer in effect. The POA must be recorded with the county if used for any transactions involving real property.
Older adults and people with disabilities or serious illness may apply to Legal Aid for help creating a durable power of attorney by calling 1-888-817-3777.
This article was written by Anne Sweeney and appeared in The Alert: Volume 33, Issue 1. Click here to read a full PDF of this issue!