Power of attorney (POA) is a legal right given to an agent to coordinate
the affairs on of another person. Different types of POA exist in Colorado,
such as financial, durable and limited POA.
Financial POA, or general POA, gives the agent the legal authority to oversee
another person's finances and property, as well as conduct business
on their behalf. The agent is obligated to make decisions based upon the
best interests of the original owner and cannot override the wishes outlined
in the POA agreement.
Someone with financial POA may:
- Withdraw money from bank accounts
- Trade stock
- Pay bills
- Cash checks
Durable POA allows an agent to make medical and financial decision on another's
behalf if they become incapacitated from an accident or illness. There
is no need to go to court in order to obtain a guardianship or conservatorship
if a POA is already in place which can save time and money.
A Limited POA, or special power of attorney, is a written document giving
an agent the power to perform certain acts on behalf of someone else.
This functions as a normal POA with certain restrictions as outlined in
How is a POA created?
Any POA can be drawn up by naming the individual you wish to designate
as your agent and including specific instructions for them. This should
then be notarized. It is usually beneficial to have an estate planning
attorney consulted or present when a POA is drafted to ensure it fits
your exact specifications.
The terms and conditions of a POA take effect according to the specifications
the document, which can occur in two different ways. Springing power means
the POA will take effect only as outlined in the document. This is often
once a physician determines a person is incapacitated. Standing power,
on the other hand, means the outlined powers become effective upon signing
of the document.
An agent is obliged to act only in your best interest and must only carry
out those instructions outlined. Agents can be held accountable for their
actions if they fail to act in your best interests. If you fear your agent
will misuse their authority, you should revoke the POA and notify all
those who have been given a copy of the document.
Contact Flatiron Legal Advisors, LLC to discuss your goals with a Boulder estate planning attorney.