Q. I have been advised that it is wise to give someone a General Power of Attorney to handle my financial affairs if I am unable to do so. What should I know about the advantages, disadvantages, and powers involved with a Power of Attorney?
A. The authority granted under a Power of Attorney gives your agent (the person receiving the power to act under the Power of Attorney) the authority to handle the authorized assets in the same manner as you. It does not take away your power and you can always revoke the Power of Attorney. The assets remain yours; the agent acquires no ownership rights in them.
You can name co-agents if you prefer. It is wise to designate successor agents in case the agent dies, becomes incompetent, or declines to act. Note that the granting of a new Power of Attorney does not revoke a previous Power of Attorney unless it is so specified. A Power of Attorney is invalid at the death of the principal (the person granting it).
The Power of Attorney can be a General Power of Attorney which gives authority over broad range of assets or it can be limited to handling specific types of assets or a particular transaction (a Limited or Special Power of Attorney).
A Power of Attorney is in effect as to all authorized assets even while the principal is competent. For a Power of Attorney to remain in effect after the principal becomes incompetent, it must specifically state so.
You can create a “Power of Attorney on Disability” which is only in effect if the principal becomes incompetent. This is touchy because of uncertainty in the determination of incompetence, so can lead to complications as to whether or not it is in effect.
The General Power of Attorney does not authorize your agent to make medical decisions. That is a completely different document.
Idaho has a comprehensive Power of Attorney Act in Idaho Code §15-12-101 which contains a recommended Power of Attorney form. It is best to use the statutory form. It does not have to be notarized but it is a very good idea to do so for maximum effect.
Never give a Power of Attorney to someone unless you completely trust both their integrity and their judgment. Even though the agent legally must act for your benefit, if the agent uses it to take your assets, the odds are very slim that you will recover them.
A Power of Attorney appears simple and can be very beneficial but it is a powerful document; therefore it is wise to review the Power of Attorney document with a knowledgeable attorney and understand its impact before signing it.