August 26, 2014
An important component of almost any estate planning is a general durable Power of Attorney for financial matters. Such a Power of Attorney allows the person granting the power (the “Principal”) to designate an attorney-in-fact to perform specific duties as enumerated in the document. Unless a Limited Power of Attorney is being granted, the attorney-in-fact is typically granted full power, authority and discretion to do all things required or permitted to be done in carrying out the purposes for which the Power of Attorney is granted as fully as the Principal could do if personally present.
Typically, some of the specific powers granted to the attorney-in-fact include, but are not limited to, the authority to sell, exchange, lease and otherwise dispose of the Principal’s property, to execute and deliver deeds, leases, assignments and other instruments, to sign and perform contracts and written instruments, to endorse and receive payment for checks payable to the Principal, to sign and deliver checks on accounts of the Principal, to withdraw from and deposit to the Principal’s accounts, and to add property to a revocable trust that has been created or may be created by the Principal.
As an attorney-in-fact is granted broad powers to act on behalf of the Principal, it is imperative that the attorney-in-fact understands that he or she is acting as the agent of the Principal in a “fiduciary” capacity. A fiduciary must act in the highest good faith for the Principal’s benefit.
The attorney-in-fact must follow the instructions set out in the Power of Attorney, must use ordinary care and diligence in everything he or she does on the Principal’s behalf, and can only do the things the Principal has empowered him or her to do. The attorney-in-fact is held to a high standard of care when acting for the Principal. Therefore, any transaction that may be suspect, if viewed by a third party, should be avoided, which would include checks written to the attorney-in-fact and signed by the attorney-in-fact, or even signed by the Principal. The attorney-in-fact should not do anything that does not benefit the Principal.
If you are interested in talking to our Estate Planning team regarding a Power of Attorney or any other estate planning matters, please don’t hesitate to contact us. We look forward to making a difference for you and your family.