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What is a Power of Attorney?

  • What is a Power of Attorney? A POA creates an agency, or as we call it in Louisiana a “mandate”. Think of it as a contract. One party is the principal, the one creating the POA. The other party is the agent, the one acting on behalf of the principal. The principal wants someone to represent him on certain matters. The Power of Attorney allows the principal to name his agent to represent him, and for the agent to agree to represent the principal. It’s really as simple as that. Within the actual document you will define and identify the parties, explain when it is to go into effect, announce the powers to be exercised on behalf of the principal, and list any limitations or restrictions.

  • What is a “Durable Power of Attorney”? Durable means that the POA will continue to be in effect, even in the principal is incapacitated. The POA does not cease to function just because the principal is incapacitated. If a POA is not durable, it could be construed as no longer applying upon incapacitation. As an example, let’s say that John has a durable POA. John falls into a coma. Can Jim, John’s agent, continue to represent him, even though John is not conscious? Yes, because the POA is durable, it is in effect and Jim can continue his duties.

  • What is a “Springing Power of Attorney”? If it is springing, the POA will not come into effect until a future condition is met. The condition is usually a form of incapacitation or interdiction. In other words, the POA will not be used until the principal is unable to act for himself. Let’s say that Jill creates a springing POA naming Bob as her agent. Jill is mentally competent and in good health. Will Bob be able to act in her place? No he can’t. The powers granted in this type of POA will not be transferred until Jill become incapacitated. For instance, if Jill falls into a coma, Bob can then act in her place. These springing POA’s usually require the certification of doctors or a court order.

  • What is a “General Power of Attorney”? A general POA covers just about everything that you can think of. You are basically granting your agent the powers to represent you in almost any situation.

  • What is a “Specific Power of Attorney”? The powers granted to the agent in a specific POA are limited. These are common when appointing someone to represent you in the purchase of real estate, a car, business, etc. They are also used to sell goods or place a mortgage on them. You are granting your agent the power to act in your place for a very specific purpose. They are usually restricted to a certain date range and for a very particular thing.

  • Do I need witnesses to sign the Power of Attorney? In Louisiana you need two adult witnesses that are mentally competent. They need to witness your signature, and then sign their own. The witnesses should have a proper ID to verify who they are to the notary public.

  • Can I use a copy of my Power of Attorney? The answer is- maybe. If you are the agent, and you are trying to perform a certain act on behalf of the principal, you will likely be asked to present the POA. Some places may be fine with a simple copy of it, and some will want to see the original. I always recommend showing the original POA, offering to let the business make a copy for their records, but never giving up your original.

  • Can the agent use my Power of Attorney to steal my money? Your POA should have several restrictions. It should limit what your agent can do. One of those restrictions should say that he can not make gifts of your property to himself. At the end of the day though, many agents do improperly abuse the POA to steal from their principals. This is why it is so important to only convey powers to someone that you trust 100%. Sure, if they steal your money you can sue them, but who wants to spend thousands of dollars chasing what they have likely already blown?

  • What is a “Healthcare Power of Attorney”? In this type of POA, you will name an agent (or agents) to represent you in healthcare matters. If you are unable to make decisions for yourself in a medical situation, the doctors can request answers from your agent. Instead of letting your family fight over who should tell the doctors what to do, this is your way of appointing one person to make the call. It is a very intelligent thing to do!

  • What is a “Financial Power of Attorney”? It is a general POA, without the healthcare portion. You appoint an agent to represent you in many matters, but not healthcare choices.

  • How do I cancel a Power of Attorney? It depends upon if you recorded it at the clerk of court or not. If you recorded your POA at the clerk of court, your cancellation of it needs to be recorded as well. If you did not have the POA recorded, you can cancel the agency my mailing a notice to your agent. I would make sure that the cancellation is clearly worded, and that it is mailed certified return receipt for your records.

  • Do I need to record the Power of Attorney? If it is a specific POA that is being used to buy real estate, or to mortgage real estate, it will need to be recorded along with the mortgage or conveying deed in Louisiana. Otherwise, no it doesn’t have to be recorded.

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