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Powers of Attorney

A Power of Attorney is a document you can use to  appoint a person (your Agent) to act for you (the Principal), either immediately or upon the occurrence of certain events such as incapacity or disability.

There are different kinds of powers of attorney for different purposes. A power of attorney can be granted for a very limited purpose such as engaging in a single transaction while the Principal is traveling or otherwise unavailable.  One can also grant broad general authority to an Agent to act for and on behalf of the Principal.   One should be aware that  powers of attorney terminate upon the death of the Principal.  A durable Power of Attorney remains valid for the life of the Principal (if not sooner revoked) and is not affected by the disability or incapacity of the Principal. In Maine, they are authorized under the Uniform Power of Attorney Act. Most states will recognize the validity of a Durable Power of Attorney provided that it is authorized under the laws of the state in which it was executed.

In estate planning, the most common purpose of having a durable power of attorney is to enable you to name another person to handle your affairs should you become physically or mentally unable to do so for yourself.  If you have not made a power of attorney and you become incapacitated or otherwise unable to manage your affairs, it may be necessary to initiate an expensive, time-consuming court proceeding to appoint a conservator and/or guardian.

As a general rule, powers of attorney are construed strictly. In other words, the powers conferred upon your agent are limited to those which are specifically stated in the document. While your intended agent may well know what you would wish for them to do under a power of attorney, it is important to spell out with some specificity, those things which you want your agent to be able to do on your behalf. This is because third parties may be reluctant to accept a power of attorney which does not specifically authorize the acts which the agent seeks to do on behalf of the principal. This can be particularly true with some banks, brokers, insurance companies and securities transfer agents.

A power of attorney which simply states that the agent may do any and all things that the principal could do may be rejected by some third parties. Accordingly, if you intend for your agent to have the authority to do everything which you could legally do yourself, the power of attorney is likely to be a somewhat lengthy document, and may need to contain special provisions which are specific to your individual needs.

The detail required in a power of attorney depends upon the nature, extent and complexity of the Principal’s assets and affairs. A business owner, or owner of out-of-state assets, including stocks, bonds and mutual funds will want to be sure that the power of attorney includes express authority to deal with those things. On the other hand, someone whose affairs are more  simple and locally based may only need a brief, but carefully drafted power to meet his/her needs.

In addition to providing for management of your financial and business affairs, another power of attorney, called a durable health care power of attorney can be used to give your Agent authority to act for you and on your behalf regarding your personal and medical care.

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