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Power of Attorney
A financial power of attorney is a legal document that allows you to name someone (called your “agent”) to act on your behalf in financial matters. If you are ever incapacitated – whether in the short-term or long-term – you are going to need someone to pay your bills, file your taxes, and handle other financial affairs. Your loved ones will have a difficult if not impossible doing these things for you without a valid power of attorney.
In that situation, they would have to have a court proceeding where a judge would choose the person to have this authority. This proceeding is often expensive, emotional, and the ongoing court supervision can be time-consuming.
A properly drafted financial power of attorney can eliminate the need for such a proceeding and ensures that you decide who can act on your behalf – rather than a judge.
What can an agent do on your behalf?
You can decide what powers you want to grant your agent. For example, you might decide it can only be used for a single transaction, such as a real estate closing. Alternatively, you can decide to make it effective for a number of financial matters.
When does it become effective?
In addition to deciding what your agent can do on your behalf, you can also decide when the document becomes effective. For example, you can make the authority effective immediately or indicate that it can only be used upon a future event, such as incapacitation. You can also choose to make it a durable power of attorney so that it remains in effect even if you become incapacitated. Regardless of what you decide, the power ends when you pass away (and so it cannot be used to avoid probate). It also terminates if you revoke it, a court invalidates it, or your agent cannot serve and you have not appointed an alternate agent.
When does it need to be updated?
If you live in Georgia, we recommend updating your financial power of attorney if your preferences have changed, your power of attorney is from another state, or if your Georgia power of attorney was prepared before July 1, 2017. While powers of attorney prepared before July 1, 2017 are technically valid, your agent will likely have a difficult time using it. A bank, financial institution, and other third-party can refuse to accept the power of attorney, and there is no way to force them to accept it.
In response to this issue, the Georgia legislature created a new law in July 2017 (and later amended it in March 2018). So long as a power of attorney conforms to this new law, financial institutions can neither outright refuse a valid power of attorney nor make it difficult to use. For these reasons, we advise our clients to update their power of attorney.
Speak to an experienced Georgia Estate Planning Attorney today
A financial power of attorney can be flexible enough to meet your needs. Talk to an experienced Georgia estate planning attorney today by calling 678-784-4150.