Frequently Asked Questions About Powers of Attorney
Frequently Asked Questions About Powers of Attorney
Last updated: October 2012
What is a Power of Attorney?
- A "power of attorney" is a legal document by which you (the "principal") give certain powers to someone else. This person becomes your "attorney-in-fact" (the "agent"); authorized to act for you, in your place.
- A "power of attorney" document specifies exactly what powers you give to your attorney-in-fact. You can limit your attorney-in-fact to very limited powers. For example, if you will be on vacation and are selling your house, you can give someone (your attorney, for instance) the power to sign the deed in your absence. Most "general durable powers of attorney," however, give your attorney-in-fact the power to do almost anything you could do.
- When it comes to dealing with banks, brokerage firms, and the like, however, the power of attorney is only as good as the institution's willingness to recognize it. Institutions can and do impose their own requirements.
What does "durable" mean?
- The word "durable" tells you that the Power of Attorney will still be good even if you become legally "incapable." This is necessary because of the law of "principal" and "agent." The agent's authority comes from the principal, so that normally, if the principal isn't capable of giving instruction to the agent, the agent loses any power to act for the principal. Instead, the Durable Power of Attorney will contain words saying that "this instrument will survive my incapacity," or something similar. The powers you give to your attorney-in-fact will remain effective even though you, the principal, are no longer able to give your agent instructions.
When does the Power of Attorney start to work?
- The Power of Attorney is effective right away. The only thing that keeps it from being used is that you don't have to give a copy to your Attorney-in-Fact immediately, and if you do, you can tell your Attorney-in-Fact not to use it unless you are unconscious or unable to act for yourself.
- You can use a so-called "Springing Power of Attorney." Connecticut has adopted a "springing" power of attorney form. The "springing" part means that the Power of Attorney does not become effective until a specified triggering event happens. Why don't all powers of attorney work this way? The problem is convincing the bank or other party that the triggering event happened! The idea is that the Power of Attorney specifies the change in circumstances that must take place before the document is activated, and also specifies some other person who must sign an affidavit that the change in circumstances has taken place. The law also says that banks and other institutions that accept the document with the affidavit are not liable. Also, it isn't clear whether such a document would be accepted in other states, and the banking community to date has been reluctant to recognize the agent's power under this kind of power of attorney.
If I give someone my Power of Attorney, does that mean I don't have any rights over my money any more?
- No. You keep the right to do anything you want with your own money and property. However, in addition, you are giving control to your attorney-in-fact, which coexist with your own powers. Remember that you are the principal, and the person you named is your agent. An agent is not allowed to do anything that the principal does not want the agent to do. If you tell your attorney-in-fact, "No, I do not want to sell the house," the house may not be sold, and the person holding the power of attorney has no legal right to sign the deed.
If I give someone my Power of Attorney, does that mean that person can take all my money or give it all away?
- If you give someone the key to your house, does that mean that person can take the furniture? The answer, of course, is, "Yes, but that does not make it legal to do so." Your Power of Attorney is as important as the key to your house, or to your safety deposit box. You must give it only to someone you trust.
If I think someone is using my Power of Attorney to steal from me, what can I do?
- First, you should revoke the power of attorney, and make sure that all financial institutions in which you have funds know you have revoked it. Second, you can go to the probate court (by yourself, or through an attorney) and demand that the person you suspect of stealing from you, file an accounting showing what they did with the money. You will need a $100 filing fee and may have to pay the person back for the cost of preparing the accounting. The court will hold a hearing at which time you can challenge the information given in the accounting. Ultimately, if it turns out that your money was taken, you can bring suit in court or even press criminal charges.
If I change my mind, can I revoke my Power of Attorney?
- Connecticut law does not provide that a new power of attorney necessarily revokes an old one.
- The power of attorney has no effect unless it is in the possession of the individual named or has already been given to financial institutions, etc. to indicate you want that person to act on your behalf. If you have not given the document out, you can revoke it by destroying it and executing a new document.
- If the power of attorney has already been recorded, or given to an institution, it may be wise to execute a document revoking the power of attorney, to be witnessed and acknowledged in the same manner as the first power of attorney. A sample document is included on this web site.
Why do Powers of Attorney look different? Why did my lawyer use a form that looks different from the one I got in the stationary store?
- The "statutory" or "short form" power of attorney is the common form Power of Attorney sold in Connecticut stores. The document lists the powers given to the attorney-in-fact by letter, but the statute fills in at length the detailed powers that are included. IMPORTANT: in the statutory form, ALL the powers listed are included; you initial in the boxes only to DELETE certain powers. The statutory form Power of Attorney included in this web site links to the statutory provisions.
- Some attorneys prefer to use a "manuscripted" or "long form" Power of Attorney. Your attorney may feel that you would rather be able to read on the face of the document the powers you are conferring, instead of having to look at the statute. They may also worry that someone in another state would not be able to determine from the document whether or not it contains a particular power. If you do execute a "statutory short form" Power of Attorney, it would be wise to keep a copy of the statute handy. You can read the statute here: Power of Attorney Statute.
I have a Power of Attorney I signed in another state. Can I use it in Connecticut?
- Most powers of attorney signed in other statues will be valid in Connecticut. In general, to use a power of attorney to convey title to real estate, the power of attorney must be signed, dated, "acknowledged" (that is, signed before a person authorized to take "acknowledgments," usually a notary public or other court official, and with the signing party stating that it is his or her "free act and deed" to sign it) and attested to (signed by) two witnesses, one of whom may also be the notary or person taking the acknowledgment.
- The practical question is not whether the power of attorney is valid, but whether a financial institution will feel comfortable honoring it. Also, if the document refers to the statutes of another state, you may have to prove what the statute said.
- It is important to remember that the laws may be different in the state where you signed your Power of Attorney. Even if the document was explained to you there, it may have another meaning when used in the state of Connecticut. Different states have different statutory protections for people signing Powers of Attorney.
I'm going to live in another state. Do I need to change my Power of Attorney?
- As noted above, the law may be different in your new state. You should always consult a local attorney when you move to a new state to see whether your old documents still "work" the way you intended.
- In some states, a Power of Attorney is not "durable" unless it is "recorded;" filed with local government. In addition, there may be special rules on how it is revoked. Check with a local attorney.
Why do I need a Power of Attorney if I'm feeling fine?
- A Power of Attorney can be an enormous convenience to you and your family. If you were to become unable to handle your own affairs -- as a result of illness, accident, or even absence -- the Power of Attorney gives your agent the power to handle your affairs for you as you would want them to do. If you became disabled by an accident, you might not be able to execute a Power of Attorney at that time.
- If you are unable to handle your own affairs and have not signed a Power of Attorney, your wife or your family might have to go to the Probate Court and receive appointment as a Conservator. The Conservator would have to post bond with the court and file an inventory and accountings. Sometimes this may be unavoidable, but many people prefer to have their affairs handled more informally and economically.
Where should I keep my Power of Attorney?
- Your Power of Attorney is an important legal document. Keep it in a safe and secure place if you want to retain control over when and how it is used. It may make sense to keep a spare copy with your attorney just in case one is lost.
- At the same time, you executed your Power of Attorney for the convenience of yourself and your family. It certainly will not be convenient if no one can find it when it is needed! Make sure your family know where to find it, or whom to ask about it when it is needed.
I had a Power of Attorney done already. Why do I need to do one again?
- There are no clear rules on when and if banks must accept powers of attorney. From a practical standpoint, it is commonly reported that financial institutions may refuse to honor a Power of Attorney executed years previously, especially if the principal was competent during that time. The bank's concern is that the document might have been revoked in the interim. Therefore, it is prudent to re-execute your Power of Attorney every five years or so.
- It is always a good idea to review your estate planning documents periodically to make sure you still agree with your choices.
- You may also want to review whether your Power of Attorney includes provision for gifts, if you would like your Attorney-in-Fact to be able to make gifts on your behalf, including charitable gifts. Your Power of Attorney is not effective, in Connecticut, to make gifts of your property to third parties, unless the document expressly says so. Other states may automatically include a moderate "gifting power" in their statutory Powers of Attorney, but Connecticut's does not. This web site includes two suggested provisions you may want to use.