Power of Attorney in North Carolina (Part1)

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A closer look at some of the specific types of decisions and issues you will have to face when you make an estate plan.

Transcript of Power of Attorney in North Carolina (Part1)

  • POWER OF ATTORNEY IN NORTH CAROLINA PART 1 CHERYL K. DAVID North Carolina Estate Planning and Elder Law Attorney One of the More Important Legal Documents Anyone can Create is the Power of Attorney, or POA A Power of Attorney Gives You Some Substantial Protections and Abilities
  • North Carolina Estate Planning Basic Understanding www.cheryldavid.com 3 One of the more important legal documents anyone can create is the Power of Attorney, or POA. A Power of Attorney gives you some substantial protections and abilities. While every estate plan is slightly different, almost every plan will rely on one or more of these vital documents. In our first of two discussions about Powers of Attorney, we are going to take a closer look at some important concepts you should understand. POWERS OF ATTORNEY Though they come in many forms and with different details, all Powers of Attorney are essentially legal documents that give you the ability to delegate some of your decision-making responsibilities. Through your Power of Attorney document, you can choose a representative who will receive the legal authority to make decisions on your behalf. When you create a Power of Attorney, you have to state not only the types of powers you choose to grant your representative, but also identify who you want your representative to be. You also have to make sure that the document itself complies with relevant laws.nt di nces.
  • North Carolina Estate Planning Basic Understanding www.cheryldavid.com 4 ATTORNEYS AND POWERS OF ATTORNEY Before we go into more detail about what Powers of Attorneys are, how they work, and what they do, it's important to clarify some basic terminology. Whenever someone talks about a Power of Attorney, you need to understand that all they are talking about is a special kind of legal document. Despite the word attorney being in the title, Powers of Attorney do not require you to be an attorney, hire an attorney, or have any kind of legal training. When you create a Power of Attorney, you do not have to choose an attorney as your representative. Further, the person you choose does not gain the right to begin practicing law. For our purposes in discussing Power of Attorney, the word attorney simply means representative. However, there is a significant caveat we need to make. Because Powers of Attorney are legal documents, you should always create them with the aid and guidance of an experienced attorney. Though you are under no legal obligation to hire an attorney whenever you make or use a Power of Attorney, you can only be certain that your Power of Attorney will be effective if an attorney creates it for you.
  • North Carolina Estate Planning Basic Understanding www.cheryldavid.com 5 AGENTS AND ATTORNEYS-IN-FACT So, now that we know that a Power of Attorney doesn't involve attorneys, we can now talk about the attorney-in-fact. When you create a Power of Attorney and choose a representative, that representative becomes known as either your agent or attorney-in-fact. The terms are interchangeable, and don't mean anything more than a person or organization who has the legal authority to represent you under a Power of Attorney. Depending on the kind of Power of Attorney you create, you can choose one or more agents, a single agent, or choose an organization to be your agent. For example, many people creating a Health Care Power of Attorney decide
  • North Carolina Estate Planning Basic Understanding www.cheryldavid.com 6 that they want a spouse or close family member to serve as their agent. On the other hand, a Financial Power of Attorney might require your agent to make significant decisions about your finances and your money. In this situation, some people choose an organization to serve as their agent, such as a bank or trust company. It's also important to point out that your agent has to be willing and capable of serving as your representative. You cannot, for example, choose a child to serve as your agent under a Power of Attorney. And while you can choose anyone you like, that person or organization has to be willing to take on the responsibility. For example, should you choose your sibling to serve as your agent under a Power of Attorney, your sibling can choose to refuse to serve. This is why it's important for you to create Powers of Attorney that name alternative agents who can step in when necessary. TYPES OF POWERS OF ATTORNEY We've already hinted at the specific types of Powers of Attorney that most people use. Though we will discuss the specific types, and how you will use them, in more detail in our next discussion, for now all you need to realize is that there are two basic types of Powers of Attorney: Financial and Health Care.
  • North Carolina Estate Planning Basic Understanding www.cheryldavid.com 7 A Financial Power of Attorney, as the name implies, gives your agent the ability to manage your money, your property, and to make financial decisions on your behalf. A Health Care Power of Attorney, on the other hand, allows an agent to make medical choices for you when you are incapacitated and cannot make them yourself. Beyond these two general types, there are also specific types of Powers of Attorney that limit an agent's authority in one or more ways. A Springing Power of Attorney, for example, gives an agent the ability to act only after certain events take place. For example, you might want to make a Springing Power of Attorney that takes effect if, and only if, you become incapacitated. There are also other Powers of Attorney that have additional limitations, which we will discuss in more detail in our next paper on this subject.
  • North Carolina Estate Planning Basic Understanding www.cheryldavid.com 8 CREATING POWERS Every Power of Attorney you create has to be made to meet your individual needs and circumstances. Not only that, but the document has to contain specific elements as required under the law. Knowing what your document must contain, what options you have when creating a Power of Attorney, and what limitations you might want to impose on your agent's authority is vital if you want to get the most out of these documents. If you have questions about Powers of Attorney or need assistance in creating or using them, you should contact the Law Offices of Cheryl David as soon as possible.
  • North Carolina Estate Planning Basic Understanding www.cheryldavid.com 9 ABOUT THE AUTHOR Cheryl David is a graduate of UNC-Chapel Hill, the University of Baltimore School of Law, and the prestigious Trial Lawyers College presided over by Gerry Spence. A former Administrative Judge, Cheryl is certified as an Estate Planning Law Specialist by the ABA accredited Estate Law Specialists Board, Inc. She is also a member of the American Academy of Estate Planning Attorneys, Medicaid Practice Systems and the National Academy of Elder Law Attorneys. In 2008, Cheryl received the honor of becoming a Fellow with the American Academy of Estate Planning Attorneys. The Fellow program recognizes Academy Members who demonstrate advanced expertise and significant practical experience in the total estate planning, trust, tax planning, guardianship, probate and estate administration fields. In order to maintain this advanced expertise, Cheryl takes over 36 hours of continuing education in Estate Planning, Elder Law, and Taxation each year. Also a Financial Planner, she holds the Series 7 and 66 Investment Licenses in addition to both Insurance and Long Term Care/Medicare designations. Her professional capabilities, together with over 25 years in practice, have combined to bring positive change to the lives of over 4500 clients and their families. 528 College Road Greensboro, NC 27410 Phone: (336) 547-9999 Fax: (336) 547-9477 WWW.CHERYLDAVID.COM