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 the document.
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.
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