Powers of attorney provide a valuable tool in creating a comprehensive estate plan. A power of attorney, at its core, involves you, as the “Principal,” nominating a fiduciary, known as an “Agent,” to act on your behalf in certain scenarios as specifically outlined in the document. A common misperception is that, even though the Principal is deceased, the Agent still possesses the authority to handle the Principal’s financial issues including accessing financial accounts. That could not be further from the truth. RCW 11.25.100(1)(a) clearly states that “A power of attorney terminates when the principal dies.” Powers of attorney are tools to assist in your estate planning while you are alive; whereas a will is a tool to manage and distribute your assets once you are deceased.
Powers of attorney can take many forms. They can be limited, such as authorizing the Agent to handle a particular transaction on behalf of the Principal. To the contrary, a General Durable Power of Attorney is more comprehensive and grants the Agent wide ranging authority to act on the Principal’s behalf. As such, great care needs to be taken in appointing an Agent to ensure that the person is both trustworthy and fully competent to perform the assigned duties. A power of attorney can become effective immediately upon the Principal’s signature, or it can become effective when the Principal is incapacitated. In addition to covering financial matters, a separate power of attorney, known as a Durable Power of Attorney for Health Care Decisions, authorizes the Agent to make health care decisions for the Principal when the Principal is incapacitated.
Durable powers of attorney are especially important for parents of young children, because they allow a parent to nominate a guardian for a child if the child’s parents become incapacitated. Durable powers of attorney can also appoint a person to make short-term or emergency health care and child care decisions on behalf of the principal’s child if the child does not have a parent with capacity to make these decisions.
Please see our blog posts for more information about powers of attorney:
What is a Durable Power of Attorney?
Recent Changes to Washington’s Power of Attorney Act
Fiduciary Duties Under Washington’s New Uniform Power of Attorney Act
Why Your Doctor Wants You to Have a Durable Power of Attorney for Healthcare Decisions
Who Makes Your Healthcare Choices?