In Part 1, Part 2, Part 3 and Part 4, I covered the important things you need to know about Powers of Attorney.
Now that you’ve thoughtfully selected who to appoint as your POA and created your documents:
- What do you do with those documents?
- What does the person you’ve appointed as POA need to know?
- What if you want to change your mind? How do you amend or revoke the POA?
What Do You Do with your POA Documents?
I get asked sometimes if there is a card, or something small that a person can carry around to show that he has been appointed Power of Attorney. The quick answer is—no. You have to have the actual paper—all the pages.
So when I have clients sign POAs, I have them sign several original versions of the same thing. That that way you can keep one with your important documents, give one to the person (or persons) appointed as POA if you want, and then I also keep an original in my client’s file.
What does the person you’ve appointed as POA need to know?
First, the person needs to know that she has been appointed. She needs to know your wishes and expectations.
She also needs to know about your important business. Consider preparing a list of important contacts: bank, investment company, insurance company, tax preparer, attorney, etc.
The person appointed needs to know how to sign if she ever has to transact business on your behalf. The formal way to sign is: (your name), by: (her name), POA.
Writing “power of attorney” or “POA” after every signature is critical. That prevents the person you appointed from taking personal financial or legal liability for you. I’ve seen a child sign a parent into a hospital, and just sign the child’s name on the paperwork. When the insurance didn’t cover the bill, the hospital successfully was able to sue the child to get paid. If that child had just written “POA” after her name, that couldn’t have happened.
What if you want to change your mind? How do you amend or revoke the POA?
Things change. Perhaps the person you’ve appointed is a long-term missionary in Africa. Perhaps something has happened, and you no longer have trust in the person you originally appointed. Sometimes there are reasons and needs to change or revoke a POA.
Signing a new POA doesn’t automatically revoke a prior one. Just signing a new version now means that you have two POAs. Maybe that’s okay in your situation; maybe it’s not. If you need to revoke it, you must take another step.
Like most aspects of POAs, this is a state-specific item. In Indiana, to revoke a POA, you need to do so in writing. That written revocation might be part of your new POA document, which revokes the old one and appoints a new person. Or, the revocation might be freestanding—just a revocation.
That written revocation needs to be given to the person appointed, and should also be given to anywhere that she might use the POA, like your bank and investment company.