to attend to his own legal matters or pay his own bills. In the wrong hands, however, a POA can give the recipient the power to do some real damage.
POAs generally come in two flavors: an unlimited, durable POA, and a limited (or specific) POA. In the following sections, we explain both types.
In almost all cases, we recommend that you not sign over power of attorney to a business or individual who’s assisting you. All that person will be doing is signing paperwork on your behalf, and this is paperwork that you should read and understand yourself before signing. You may want to give POA to a trusted family member if you can’t be somewhere to sign the papers, but you should read the documents yourself beforehand and, if at all possible, sign them yourself.
Unlimited, durable power of attorney
An unlimited, durable power of attorney assigns the grantee unlimited power to make decisions and take action on your behalf. The grantee can execute deeds, mortgages, bills of sale, and so on. The term durablemeans that the grantee holds this power and will continue to hold it even in the event that the grantor becomes incapacitated. This is the broadest grant of power and authority, allowing the grantee to do just about anything. Figure 9-1 shows a sample unlimited, durable power of attorney document.
The opening clause in the POA specifically states that the grantee is supposed to act in a “fiduciary capacity.” This basically means that the person is supposed to treat your money better than she treats her own money.
Conveniently, con artists take this to mean that they can treat themselves to your money.
Power of Attorney
Powers of Agent. I grant to Agent full power and authority to deal with my estate, property, and affairs as fully as I might or could do if personally present. All powers shall be exercised in a fiduciary capacity in my best interests and for my welfare. The following specifically enumerated powers are intended to amplify, rather than to limit or restrict, the general power of attorney granted here:
a. to buy, sell, mortgage, or otherwise deal in any way in any real or personal property, or any interest in the property, on whatever terms Agent shall think proper, including the power to buy United States Treasury Bonds that may be redeemed at par for the payment of federal estate tax;
b. to collect, hold, maintain, improve, invest, lease, or otherwise manage all of my real or personal property or any interest in the property;
c. to transact every kind of business of any kind;
d. to deposit and withdraw (by checks or withdrawal slips) in or from any banking institution, any funds, negotiable paper, or moneys that may come into Agent’s hands as Agent or that I now or later may have on deposit or be entitled to;
e. to exercise any incidents of ownership I may possess with respect to policies of insurance except policies insuring the life of Agent;
f. to make application to any governmental agency for any benefit or government obligation to which I may be entitled;
g. to engage in any administrative or legal proceedings or in any litigation in connection with the premises;
h. to act as my Agent or proxy in respect to any stocks, bonds, shares, or other investments, rights, or interests I may now or later hold, including the power to redeem, transfer, or convert United States Savings Bonds;
i. to engage and dismiss agents, counsel, and employees, and to appoint and remove at pleasure any substitute for Agent, in respect to all or any of the matters or things mentioned in this document and on whatever terms
Agent shall think fit;
j. to prepare, execute, and file income and other tax returns, and other governmental reports and documents;
k. to transfer any interest I may have in property, real or personal, to the trustees of any trust created by me for my benefit, specifically including the power to assign, endorse, and transfer any stocks, bonds, options, or other securities of any nature at any time standing in my name and to execute any documents to effectuate the foregoing;
l. to have access to my safety deposit box or boxes.
Restrictions on Agent’s powers Notwithstanding the foregoing, Agent
a. cannot execute a will, a codicil, or any will substitute on my behalf, or change the beneficiary on any life insurance policy that I own;
b. cannot make gifts on my behalf.
Durability. This durable power of attorney shall not be affected by my disability except as provided by statute.
Figure 9-1:
An unlimited, durable power of attorney gives the grantee the power to do just about anything on your behalf.
Limited power of attorney
A limited (or specific) POA typically restricts the person’s power to a specific transaction. This allows the grantee to handle the transaction as if the grantor were doing it herself, but it doesn’t give the grantee the power to do anything else except what is specifically listed.
Limited POA is often used in real estate transactions for a particular parcel of land, as shown in Figure 9-2. It may grant POA to the spouse, for example, who can sign on behalf of the couple. After the transaction is completed, the power is usually revoked or expires within a relatively short period of time.
Power of Attorney
I, [name of person granting power of attorney] of [address] appoint [name of attorney] of [address] as my true and lawful attorney (Attorney) for me in my own name, place, and stead, giving and granting to my Attorney full power and authority to perform all rights and things requisite and necessary to complete any negotiations and agreements pursuant to a purchase agreement entered into by me dated [date of purchase agreement], for the sale of the real property located in
[village/city/township], [county], described as
[insert legal description, tax identification number, and address]
(Premises) and to convey all of my right, title, and interest in the Premises.
Figure 9-2:
Limited power of attorney significantly restricts the grantee’s powers.