A power of attorney (“POA”) is a critical estate planning tool that allows you to appoint another person to make legal and financial decisions on your behalf. It creates a legal relationship where you, called the principal, allow another adult, called the attorney-in-fact, to handle your specified legal, financial, or property matters.
Types of POAs
There are primarily two types of powers of attorney used in Minnesota, the statutory short form, as provided in Minnesota Statutes, and the common law form.
Both forms allow for the POA to either not be affected by the principal becoming incapacitated or incompetent or to begin its effect upon the principal becoming incapacitated or incompetent. That is, this (durable) POA either remains in effect or takes effect upon the principal’s incapacity due to illness or an accident. A non-durable POA expires if you become incapacitated.
Do You Need a POA?
A durable power of attorney may be the most important instrument in your estate planning portfolio, including your will. The durable POA grants the person you appoint as your attorney-in-fact — your agent — to carry out your financial and other affairs according to your wishes if you become incapacitated.
You can see, then, that the person you appoint to be your attorney-in-fact needs to be someone you trust to make decisions in your best interest and according to your wishes. You can also list a primary option for your attorney-in-fact and any number of back-ups you want in case the primary option is unwilling or unable to act.
Any attorney-in-fact or agent acting on your behalf must keep complete records of all transactions.
They can handle such transactions on your behalf as:
If you become incapacitated and can no longer manage your affairs and you do not have a durable POA, your loved ones may be forced to petition the court for a conservatorship, which is expensive and time-consuming. But remember, if you are mentally competent, you can revoke or change your POA at any time.
Contact the estate planning and elder law attorneys of Bolt Hoffer Boyd Law Firm at (763) 406-7000 for a free initial consultation. We can assist you in determining which type of power of attorney is best for you.