A Power of Attorney (POA) is a legal document granting an agent the authority to handle specific matters on your behalf. You should consider establishing a POA if you want someone to manage your financial and medical affairs when you can’t speak for yourself.
Here, we explain the different types of POAs, how to create them, and why you should include a well-prepared Will and Trust in your Estate Plan.
Types of Power of Attorneys in Virginia
In Virginia, the two most valuable POAs you can create include:
- Financial POA – A Financial Power of Attorney allows your chosen agent to manage your business or financial matters if you’re incapacitated or otherwise incapable of handling them yourself.
- Medical POA – A Medical Power of Attorney grants your agent the authority to make Medical decisions on your behalf. You create a Medical POA with an advance medical directive to outline your wishes for medical treatment.
Each POA is effective once you sign unless the document states a future date or specific event for it to take effect. Both are considered durable POAs, meaning they’re effective even after you’re incapacitated.
Incorporating a POA in Your Will
You must create a Last Will and Testament during Estate Planning. A Will allows you to select the heirs you want to receive your assets upon death. You can also name an executor to distribute those assets according to your wishes in the Will.
If you die without a Will, assets required to go through probate will pass to survivors through intestate succession. That means your property will transfer to surviving family members according to their place in the line of succession.
For example, if you have a spouse and no other descendants, they will receive everything. However, if you have a spouse and children, they split a specific percentage of your assets.
You might think you don’t need a Will if you have a POA or don’t need a POA if you have a Will. However, both are necessary. A POA is only effective during your lifetime, while a Will takes effect when you die. Having both provides ongoing asset protection.
Why You Should Consider Setting Up a Trust
A Living Trust is a valuable tool in Estate Planning. You can transfer and control assets in a Trust while you’re alive. Choosing a successor trustee to manage your Trust when you die is crucial. That person assumes control and distributes the remaining assets to your designated beneficiaries.
A Living Trust is beneficial because your successor trustee can access the assets automatically upon your death. They don’t need anyone’s permission to transfer property.
The agent under a POA doesn’t have automatic authority over the Trust unless they are also the successor trustee. That means they must present credentials to financial institutions before gaining access.
Typically, Trusts don’t hold all the property a person owns. Your successor trustee can’t use a bank account if you don’t transfer it into the Trust. That’s where your Financial POA agent steps in. They can control the assets not held in Trust. By establishing a Trust and Power of Attorney, you protect every asset while you are alive and after you pass away.
Who Is Legally Allowed to Act as an Agent?
Any competent adult can be an agent for a POA. However, you should select a person you trust to fulfill their duties.
Picking someone irresponsible with money isn’t the best choice to manage your finances. For your Medical POA, choosing a person with minimal to no knowledge of your medical situation can also create challenges. They might not understand your illness, injury, or medical condition well enough to make critical decisions based on what you would want.
Requirements for Creating a Power of Attorney
According to Virginia Code 64.2-1603, a POA is valid if the person creating it has the mental capacity to understand the nature and consequences of their actions. Notarization isn’t required, but your signature is presumed genuine if signed before a notary public.
Create a Legally Enforceable POA with Anchor Legal Group, PLLC
Anchor Legal Group, PLLC provides dependable and effective legal representation to Virginia Beach clients. We can protect your rights and interests while assisting you with your Power of Attorney and other Estate Planning documents.
If you want to learn more about creating a POA, call us at 757-529-0000 for a consultation with a knowledgeable Estate Planning Attorney.