Power of Attorney in North Carolina (Part1)
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POWER OF ATTORNEY
IN NORTH CAROLINA
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
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
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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
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.
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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
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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
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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
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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.
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ABOUT THE AUTHOR
Cheryl David is a graduate of UNC-Chapel Hill, the
University of Baltimore School of Law, and the
prestigious Trial Lawyer’s 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