When the Unthinkable Happens
Let’s consider a rather unpleasant scenario. Imagine you’ve been involved in a serious car accident. You’re injured so badly that your medical team places you in a medically induced coma to give your body a chance to recover. In that state, you’re unable to communicate with others—or really do much at all other than rest and heal.
No one enjoys thinking about this sort of thing, but prudence counsels us to consider what tools we can use to make sure our affairs are handled properly and our loved ones are taken care of—even when the unthinkable happens. One such tool is the power of attorney.
What Is a Power of Attorney?
The term “power of attorney” gets thrown around fairly often when people start talking about estate planning or caring for family members with serious health problems. But what does it actually mean—and who needs one?
To get one (perhaps obvious) thing out of the way: granting a power of attorney is not the same thing as hiring a lawyer. Rather, it means giving someone you trust the authority to handle your legal and financial affairs as if they were standing in your shoes.
This can get confusing because a person who has been appointed under a power of attorney is sometimes called an “attorney-in-fact.” Instead of using that term, we’ll follow the lead of the Virginia Uniform Power of Attorney Act and call that person an “agent.”
What Can an Agent Do?
If you’ve designated an agent under a power of attorney, Virginia law gives that person authority to manage and invest your assets. You can grant an agent a limited set of powers or make the authority broad enough to allow them to do anything you could legally do yourself.
Under Virginia Code § 64.2-1624, agents may:
- Demand money owed to you and pursue repayment through litigation
- Enter into or modify contracts on your behalf
- Sign (or “execute”) documents for you
- Participate in alternative dispute resolution
- Seek help from courts or government agencies
- Hire and pay professionals like attorneys or accountants
- Prepare and file documents to protect your legal interests
- Communicate with government agencies
- Access your communications
- Take other lawful actions related to matters like real estate or bank accounts
What Responsibilities Does an Agent Have?
An agent must act in accordance with your wishes and best interests, in good faith, and within the limits of the authority you’ve granted. Virginia Code § 64.2-1612 outlines these duties in more detail, and § 64.2-1615 provides that an agent may be held legally liable for violating them.
When Does a Power of Attorney Take Effect?
You can set up a power of attorney to take effect immediately upon signing or upon a triggering event, such as your incapacity. If incapacity is the trigger, complications can arise around proving that you’re incapacitated. There are ways to address this, but that’s beyond the scope of this short article. An estate planning attorney can help you navigate those details.
Why It Matters
The power of attorney is a potent tool that allows someone you trust to take care of your interests while you’re alive but unable to manage them yourself. It’s an essential part of a well-rounded estate plan.
Taking the time to think through these possibilities—and to put tools like this in place—can prevent major regret in the future.
If you’d like help setting up a power of attorney or have questions about your estate plan, schedule a consultation with the Law Office of Levi Jones today. I’m here to help you plan with confidence and peace of mind.