When some people hear the term “power of attorney,” they envision — or rather, fear — turning over their lives lock, stock, and barrel to someone else.
Though one could theoretically create such a total power of attorney, it would still be constrained by mandates such as a fiduciary obligation on the part of the person being given the power.
That’s why it’s important to seek the legal counsel of an attorney experienced in drafting powers of attorney. If you’re in or around Shreveport, Louisiana, contact me — Robert B. Dunlap, Attorney at Law. I will advise and guide you through the creation of a power of attorney that serves the exact purposes you desire.
In Louisiana, a power of attorney (POA) is also known as a “procuration,” which is a document signed only by the principal granting the authority, or a “contract of mandate,” which is signed by both the principal and his “mandatary,” or recipient of the vested power, often referred to as the agent.
Generally, a power of attorney bestows upon another individual the right — or legal power — to make decisions on behalf of the grantor of the power, or principal. Powers of attorney are often used to prepare for the incapacitation of the principal, but also can be used for more everyday purposes or for specific purposes. The four types of powers of attorney most commonly used in the U.S. are:
In Louisiana, POAs do not automatically terminate upon the incapacitation of the principal unless specified to do so in the document itself. Therefore, in Louisiana, there are usually only two types of POAs: General or Limited (aka Specific).
Perhaps the most common reason people establish a power of attorney is to have someone act on their behalf should they become incapacitated. Other reasons include a busy lifestyle that keeps you away from home a lot, or in general keeps you too occupied with work and business matters, and the POA gives someone the right to manage your daily affairs and finances for you. As mentioned above, a POA can also be used for more specific purposes, or be limited to time- or event-specific occasions.
POAs cannot be effectuated on your behalf once you become incapacitated. In that case, your family or loved ones will have to go to court in a costly, time-consuming process to get a guardian or conservator named. Neither the individual nor the family, in that case, will have any control over who is chosen.
This brings up the point of who to choose to be your agent. Obviously, whoever you choose — a trusted family member, advisor, lawyer, or friend — must be someone you trust completely, as they will have often access to your finances, and in the case of a durable POA used for medical reasons, the ability to make life-or-death decisions regarding your healthcare.
Though your agent can be awarded the power to make financial and other decisions on your behalf, they are under a fiduciary obligation to make prudent decisions. Courts, however, have largely shielded agents from liability over financial losses unless fraud or misconduct can be proven. In any case, it is wise to choose your agent carefully.
Some people may also ask, “If I have a will, why do I need a power of attorney?” Remember, the two are completely different documents with different purposes. A will distributes your assets after your death. A power of attorney deals with issues while you’re still alive.
A living will, however, can complement a POA by addressing specific health decisions you would like to see made on your behalf should you become incapable of doing so yourself. An advanced healthcare directive can also serve to spell out which healthcare choices to make should you become incapacitated.
A power of attorney is one of many tools that can be employed in estate planning, which involves not only the living years but also the time after your death when family and loved ones need to be taken care of.
Many people are reluctant to take concrete steps to plan for the future. It’s not an easy subject to think about. A power of attorney, however, is a valuable instrument to have on hand for a variety of situations in life, both foreseen and unforeseen. After all, none of us knows what’s really going to happen in the future. Why not have someone you trust ready to step in for you when needed?
A power of attorney doesn’t have to be a surrender of all decision-making to another party. Generally, POAs are well focused with safeguards and limitations in place. You need a trusted, experienced power of attorney/estate planning lawyer to help you craft the exact power of attorney you want and need.