Durable General Power of Attorney
A Durable General Power of Attorney is a written document that authorizes an “Attorney in Fact” to act on your behalf. This document is different from a Durable Health Care Power of Attorney because this document concerns property and contract rights not health care or matters related to your person. The Durable General Power of Attorney conveys to your Attorney in Fact the powers and authority to handle all kinds of transactions on your behalf regarding your property, contracts, and benefits. senior woman reading paperwork The kinds of transactions an Attorney in Fact may conduct include paying monthly bills, collecting rents, voting stocks, running a business, buying or selling real estate, or negotiating the terms governing hiring caregivers or admission to a nursing home.
A power of attorney is “durable” when the power remains effective even if you are incompetent or unable to communicate. That means, the document is designed to continue to be effective when you are disabled or no longer mentally competent and you cannot act on your own. The Power of Attorney must contain specific language in order to qualify under Tennessee law as “durable.”
THINGS TO THINK ABOUT
A Durable General Power of Attorney is a very important part of planning. The most crucial choice may be who to name as your Attorney in Fact. The person you choose should be trustworthy, conscientious about record keeping, organized, responsible, and reliable. You should consider naming a successor Attorney in Fact as a back-up. Bond typically is not required but having your Attorney in Fact account to another person is recommended. Compensation for services as Attorney in Fact is optional and should be set forth in the document.
POWERS THAT ARE OPTIONAL OR EXTRAORDINARY
Our statute has a long list of powers that your Attorney in Fact will require in order to effectively manage property. These are the default powers, such as dealing with money, filing tax returns, and entering contracts. Some special powers to consider adding to the general ones include: making gifts; exercising powers you may have over income or principal of a trust or fiduciary positions occupied by you; changing beneficiary designations on bank accounts or life insurance policies; changing right of survivorship designations on real or personal property; disclaiming property; exercising rights of elective share; and making health care decisions.
REVOKING POWER OF ATTORNEY
The way your documents are written affects the process for changing them. Often you can revoke a Durable Power of Attorney by giving written notice to your Agent or Attorney in Fact. You may also want to notify your financial institutions where your Agent or Attorney in Fact conducted normal business on your behalf and file the revocation with the Register’s Office in the county where you live.
BEING A FIDUCIARY
If you are named as an Attorney in Fact under a Durable General Power of Attorney, you are considered to be a fiduciary. A fiduciary is in essence a trustee. A fiduciary is a person who is entrusted with a duty or undertaking and must act primarily for another person’s benefit in all matters connected with the undertaking. Scrupulous good faith and candor are required. Be sure you have thoroughly read and understood the Power of Attorney that nominates you to serve as Attorney in Fact. If the document contains language that you do not understand or if you are uncertain about carrying out your duties, you should get legal advice. Often the Power of Attorney will provide for payment of reasonable and necessary attorney fees from the assets of the person you are assisting. Getting sound advice before acting can avoid problems down the road.