Power of Attorney (POA)
Summary
A power of attorney (POA) is given by a principal (client) to an agent so the agent can act on their behalf. Agents (attorney-in-fact) have a fiduciary duty to act in the best interest of the principal and have a duty of loyalty to them. A breach of this duty may incur liability for the agent and potentially for Edward Jones.
• What is a POA?
• What is a durable POA?
• Who should have a durable POA?
• What is a springing POA?
• What is a Health Care Power of Attorney?
Important: State laws vary
It is critical to note that state law varies on how powers of attorney are executed and interpreted. It is important that clients consult with their legal professional prior to executing any estate planning document.
What is a POA?
A power of attorney is a written instrument that authorizes one to act as an agent on behalf of another person. It terminates upon the death or incapacity of the principal. The powers of the agent will be governed by the written instrument and applicable state law.
What is a durable POA?
A durable power of attorney continues to be effective following the incapacity of the principal.
Generally the agent will have authority over the principal’s assets that are not titled in the living trust.
For married couples each spouse should execute his/her own durable power of attorney.
Who should have a durable POA?
It is often recommended that most people have a durable power of attorney. This may be obvious in the case of an individual in poor health or experiencing incapacity. It may be less obvious for those individuals who are currently healthy and able to take care of their own affairs. However, should an unexpected event happen to these individuals, such as an accident or sudden illness, these individuals would need someone to step in and help them with their affairs.
It is important that the person who is chosen as the attorney-in-fact is one that is trustworthy and will carry out your wishes. As soon as the power of attorney is executed, the attorney-in-fact has authority over your financial affairs.
What is a springing POA?
A springing POA will go into effect upon a triggering event. Those individuals who do not want another person to have current power to manage their affairs, but power only after they become incapacitated, may find a springing POA useful.