Despite the name, powers of attorney don’t vest anyone with permission to practice law. Instead, the document allows individuals to grant agency authority, whether general or limited, to an approved representative. This may be an attorney, family member, business partner, or friend. A power of attorney (or “POA”) serves multiple functions but has limitations. In addition, every state has different standards for creating, filing, and terminating powers of attorney. As such, it’s important to draft and execute this legally binding document through a qualifying lawyer. To discuss preparing personalized powers of attorney in Virginia or D.C., connect with the dedicated agency and estate lawyers at McClanahan Powers, PLLC by calling (703) 520-1326 or contacting us online.
Function and Scope of Powers of Attorney
Powers of attorney serve more than estate planning functions; although, seniors often benefit from granting specific authority to younger family members. In addition, Virginia military families, business partners, incarcerated parties, and legal clients might take advantage of POAs. These legal documents allow another person to act on the principle’s (grantor’s) behalf without necessitating grantor notice or approval. Significantly, grantors can limit the scope of this authority to a single transaction, business matter, or lawsuit. They can even indicate when it expires.
Virginia recognizes powers of attorney provided they meet the requirements outlined in the Virginia Uniform Power of Attorney Act, which includes being signed by the principle (or at the principle’s conscious authorization) before a notary public. Importantly, Virginia law allows agents to request reasonable reimbursement and payment for related expenses unless otherwise specified. It also provides agents with certain liability protections and requires third parties to accept validly executed powers of attorney when conducting business. However, the agent must act by the following duties outlined in Va. Code § 64.2-1621 unless otherwise specified:
- Act only in good faith
- Act only within the scope of authority outlined in the POA
- Act in the principle’s best interest and within the bounds of the principle’s reasonably known expectations
- Keep records of all transactions, payments, and receipts
- Act loyally and avoid creating conflicts of interest
- Act with competence, diligence, and care
- Coordinate with holders of healthcare proxies
- Work to preserve the principal’s estate and estate plan.
Failure to abide by these standards could result in claims of breach of fiduciary duty and financial liability. Moreover, Online POAs and related forms seldom comply with the intricacies of Virginia law, which might override the principle’s intent and interests. Lawyers recommend obtaining powers of attorney drafted to suit your unique needs, especially if the POA involves large estates, business partnerships, and high-value financial transactions.
Benefits of Executing a POA
Unlike court-ordered guardianship, powers of attorney are voluntarily executed documents. As a result, the principle controls the scope of the POA, including when it expires and its durability. Because the law requires third parties to acknowledge valid powers of attorney, they benefit busy business owners, military members, and seniors. Common examples include deployed soldiers granting spouses power of attorney to finalize real estate transactions, legal clients granting attorneys full authority to gather evidence and settle claims, seniors authorizing adult children to handle estate and tax inquiries, and business owners empowering trusted employees to complete transactions.
While principles might unofficially allow family members to handle these issues, many complex legal transactions require the principle’s active participation and time. Powers of attorney bypass these requirements by obliging third parties to work with the agent without the principle’s involvement. This authority drastically reduces the stress on seniors with declining health, parties to complex litigation, principles struggling with medical conditions, and active-duty soldiers. It simply allows trusted individuals to handle these matters without your detailed involvement. If you’re incapacitated without a power of attorney, this may create serious legal issues for your family resulting in expensive and lengthy guardianship proceedings.
Types of Powers of Attorney
As long as the authorizing document adheres to the Virginia Uniform Power of Attorney Act, knowledgeable estate lawyers can draft the POA to suit your unique needs. Most principles choose one of the following types of powers of attorney:
- General – This extensive POA allows the agent to undertake all transactions authorized by agency law, including managing businesses or estates. In addition, senior may execute general powers of attorney on behalf of children (co-agents are permissible) during the estate planning process.
- Special/Limited – Many Virginia residents need powers of attorney for one transaction or lawsuit, i.e., closing a home. In these cases, legal counsel may prepare limited powers of attorney authorizing agents to complete a single transaction before automatically expiring. These powers of attorney may also cover individuals during periods of incarceration or sailors during overseas deployments.
- Medical (Healthcare Proxy) – Traditional powers of attorney cannot authorize agents to make healthcare decisions. Instead, principles must execute separate medical POAs or healthcare proxies. Lawyers often recommend executing both documents together during the estate planning process.
- Springing – This power of attorney springs to life at a future date or on the happening of a future event, i.e., mental incapacitation. It may be limited, general, or durable.
- Durable –Virginia powers of attorney are automatically durable, which means they maintain validly during periods of mental or physical incapacitation. If you do not want your POA to cover periods of physical or mental incapacitation, you may alter durability in the document.
Any document that creates a valid agency relationship could function as a power of attorney in Virginia. However, many such documents do not extend over state lines unless. If you conduct business or hold property in multiple jurisdictions, an experienced agency lawyer can draft and file powers of attorney that maintain validity in numerous jurisdictions.
Connect with the Virginia & D.C. Estate Planning Attorneys at McClanahan Powers, PLLC
Planning your estate now, including drafting personalized powers of attorney, can help families avoid guardianship proceedings, save money, and protect loved ones during difficult seasons. Virginia seniors and military families should consider the benefits of executing limited or general powers of attorney with the estate and agency lawyers at McClanahan Powers, PLLC. Schedule your POA appointment today by calling (703) 520-1326 or contacting us online.