Welcome to our monthly series: Translating Legalese with Barton Law. Legalese is used to describe legal terms and documents that are difficult for non-lawyers to understand. As attorneys, it is our job to translate these terms and documents for you to help you make well-informed decisions. Each month we translate legal terms that clients often find confusing so don't forget to check back in monthly!
First, what is a General Power of Attorney (POA)? A General POA is a document by which an individual (referred to as the principal) names another person(s) or entity, in writing, to serve as agent to act on his behalf for his financial and non-medical* affairs. This financial and non-medical affairs typically include managing real estate, bank accounts, investment and retirement accounts, filing and paying taxes, and other pertinent matters. The agent may only act on the principal's behalf to the extent the principal reasonably wants him to and within the principal's reasonable expectations.
The term "durable" indicates that the POA can be used regardless of the principal's incapacity or disability. In other words, the document can be used even if the principal is fully competent and mentally and physically able to manage his affairs on his own. For example, the principal may be taking a six-month backpacking trip and need his agent to manage his real estate, bank accounts and other bills until he returns. Typically, the document is used because the principal is unable or unwilling to manage his own affairs due to incapacity or disability. Rather than pursue a guardianship through the Court, the agent(s) named in the POA can exercise the powers in the document. In some cases, the principal just wants help managing his affairs and asks his agent to start assisting him with specific tasks such as managing monthly bills.
A "Springing" POA is used for the same purposes, but cannot be used until some specific event occurs (or springs), and provides instructions to allow the agent to begin serving. In most cases, the document is used to stipulate that the agent may not begin serving on the principal's behalf unless he is deemed incapacitated or fully disabled, in writing, by two attending physicians. The Springing POA and written statements by the physicians are then required to be provided to any and all institutions and organizations relying upon the document. This document is generally not recommended for most clients and instead is reserved for specific circumstances.
*A separate document known as a Medical Power of Attorney is typically executed to name an agent to act on his behalf for medical affairs, or the General POA can also include language for to include medical affairs.