Your child has gone away to college, and needs your help to rent an apartment, deal with student loans, or file a tax return. Your son or daughter was deployed, or your elderly aunt has been in the hospital, and needs your assistance in paying the bills. All three of these situations call for a power of attorney.
A power of attorney is a written record that grants authority to a person to act in the place of someone else. The person granting the power of attorney is the principal. The person who is given the authority to act for another person is the agent.
In 2017, Georgia passed the Uniform Power of Attorney Act, which means that its law in this area is now consistent with the law of the other 25 states that have passed the act. This act provides a simple way for people to deal with their property and finances by providing a power of attorney in case of future incapacity.
General financial powers of attorney in Georgia are durable, meaning they do not automatically terminate on the incapacity of the principal. Therefore, if the principal were to become too ill to care for himself or his own affairs, then the agent would still be able to act on his behalf.
Financial powers of attorney must be signed by the principal, at least one competent witness, and notarized by a notary public who is not one of the witnesses. All the signatures must take place at the same time. The power of attorney is effective once it has been executed, unless the document provides it becomes effective on some future event.
A power of attorney remains in effect until
- the principal dies,
- if it has been revoked by the principal,
- if the agent resigns, becomes incapacitated, or dies and there is no successor agent,
- if it terminates on a future contingency, or
- if the purpose of the power is accomplished.
Likewise, an agent’s authority under the power of attorney will end if
- the agent resigns, is incapacitated, or dies,
- if his authority is revoked,
- if the power of attorney terminates, or if an action is filed for divorce or annulment of the agent’s marriage to the principal or their legal separation.
Unless the power of attorney specifies otherwise an agent is not entitled to compensation for services rendered, although he is entitled to reimbursement of reasonable expenses.
An agent is required to act in accordance with the principal’s reasonable expectations, in good faith, and only within the scope of the authority granted in the power of attorney. An agent must act loyally for the principal’s benefit, keep a record of all transactions made on behalf of the principal, and attempt to preserve the principal’s estate plan, to the extent actually known by the agent.
An agent that violates the provisions of the Act is liable to the principal for the amount required to restore the value of the principal’s property to what it would have been but for the violation and reimburse the principal for attorney’s fees and costs.
The principal may make a general grant of authority, or limit the authority of the agent to a specific area, or a group of areas. Certain types of authority must be expressly granted in the power of attorney, such as the authority to make gifts, create or change rights of survivorship, create or change beneficiary designations, or control the content of electronic communications sent or received by the principal, just to name a few.
Any number of situations call for a power of attorney. These can include powers of attorney granted so that bills can be paid while the principal goes out of the country, or to allow parents to manage the finances of university students who are away at college, or to allow family members to assist with managing the affairs of an aging relative.
If you need a financial power of attorney, then please contact us. We can help.