Power of attorney is one of the most important estate planning documents. According to the Ohio State Bar Association, a power of attorney allows you to appoint someone to act on your behalf in the event you are unable to do so. You are vulnerable without a legally valid power of attorney in place.
As important as power of attorney is, many people still do not fully understand how they work. There are many misconceptions about powers of attorney. In this article, our experienced Ohio estate planning attorney debunks four all too common myths about powers of attorney, and discusses one very important issue with a power of attorney.
Myth #1: Power of Attorney is Permanent
False. A power of attorney is not permanent. Under Ohio law, a person retains the right to modify their power of attorney. In fact, you can even revoke power of attorney altogether. If you are of sound mind, your power of attorney documents can be altered to adjust to your current needs. Also, changing power of attorney documents does not have to be a complicated or arduous process.
Myth #2: You Can Change a Person’s Will With their Power of Attorney
False. Power of attorney cannot be used to modify a person’s will. This is one of the biggest myths about powers of attorney. If you grant a person your power attorney, they are bound by limited authority. While that authority is considerable, it does not include the ability to rewrite a will. A well-crafted estate plan will typically include both a will and power of attorney.
Myth #3: Power of Attorney is an Inflexible, One-Size-Fits All Tool
False. Power of attorney documents can be customized to meet the specific needs of each individual person. It is not simply a one-size-fits-all legal document that you fill out. You can grant one trusted person durable power of attorney — giving them the authority to make financial, legal, and healthcare decisions on your behalf should you become incapacitated. Alternatively, you could divide up the tasks across several trusted loved ones. Power of attorney is flexible.
Myth #4: You Can Use Power of Attorney to Handle the Estate After a Person’s Passing
False. Once a person dies, their power of attorney is extinguished—it is revoked by the death of the person who gave the power. Period. In other words, power of attorney has no legal effect after a person’s death. It cannot be used to handle or administer their estate or manage affairs. An estate plan should put the right structure in place to ensure everything can be effectively handled after one’s passing. Power of attorney is meant to provide protection while a vulnerable person is still alive. (There is one very narrow exception to this rule of law, not discussed here.)
Powers of attorney can have several issues. Perhaps the biggest issue is that some financial institutions will only accept their own power of attorney. It is a prudent practice to take your power of attorney document to your bank/financial advisor and have them make a copy for your file, or tell you that they need you to sign their power of attorney document, rather than have your agent learn too late that your power or attorney document is not accepted by that financial institution. You should discuss other issues with these documents with a lawyer who has experience in drafting and advising clients about powers of attorney.
Call Our Cortland, OH Estate Planning Lawyer for Help
At The Law Office of John C. Grundy, our Ohio estate planning attorney has extensive experience helping clients set up powers of attorney. If you have questions about your rights or options, we can help. To request a completely confidential estate planning consultation, please contact our legal team today. We serve clients all over Northeast Ohio, including in Trumbull County, Geauga County, Mahoning County, and Portage County.