Giving someone else power of attorney in Arizona can be a difficult and emotional decision. After all, power of attorney documents are typically associated with the mental incapacitation of the writer, or principal. As such, the principal must feel comfortable letting someone else, the agent, make significant lifestyle and/or fiscal choices.
Understanding the purpose and general power of attorney rights, responsibilities and limitations as they pertain to power of attorney agreements is essential for both the principal and the agent. First, though, the principal should have a basic knowledge of the general types of powers of attorney.
Types of Powers of Attorney in Arizona
Unlike some states that only focus on two types of powers of attorney, Arizona recognizes three.
The first is a medical power of attorney, which covers most healthcare decisions and related needs. When and if the principal is unable to sufficiently make his or her own medical choices, the agent is expected to act on behalf of the principal. Ideally, the agent will have intimate knowledge of the interests of the principal. However, the principal can be very specific as to end-of-life care and other considerations to help the agent make the right call.
The second type of power of attorney is related to the medical power of attorney and is a mental healthcare power of attorney. It is more narrowly focused than the more generalized medical power of attorney, as it relates purely to mental health concerns of the principal.
The third and final type of power of attorney in Arizona is a financial power of attorney. As the name suggests, the agent in the financial power of attorney can handle tasks and expectations related to assets and cash. These could be very specific, such as simply paying bills and balancing accounts. Or the rights granted could be widespread and include buying and selling investment vehicles such as stocks, bonds, and real estate.
Customizing a Power of Attorney Document
When principals work diligently with their attorneys to create powers of attorney, they can expect to talk about everything from investment decisions to medical decisions. These conversations may be tough at times, because no one likes to imagine being unable to make choices or have mental or physical freedom.
The more honest the discussion between attorney and principal, the more appropriate the powers of attorney will be to the principal’s unique circumstances. Plus, if the attorney is also handling other estate planning for the principal, the powers of attorney will line up nicely with other documents such as a living trust or will.
Who Can Be Named a Power of Attorney Agent?
The power of attorney agent plays a significant role in enacting the interests of the principal. There is no law governing exactly who should be an agent, although the agent will need to be a legal adult of sound mind. Often, principals choose spouses, children, business partners, and friends. In the case that a principal wants an agent outside of family and friends, the principal may consider hiring a professional, objective fiduciary.
Does the Power of Attorney Agent Get Paid?
The law enables an agent to receive compensation for serving in that capacity. An hourly fee is the typical manner of payment. A principal can also authorize the reimbursement of expenses incurred by an agent, such as for travel, lodging, etc.
What Can a Named Power of Attorney Agent Do?
All power of attorney documents are one-of-a-kind and based on the needs and wants of the principal. With that being said, all agents can expect to be able to legally perform several duties when the power of attorney goes into effect.
- The medical agent can make healthcare decisions from the routine to the extensive, acting on behalf of the principal based on his or her known wishes. This can include choosing an affordable long-term assisted care facility, selecting key doctors, and scheduling appointments. The medical agent should be keenly aware of what the principal would do if he or she could.
- The financial agent is expected to perform all the fiduciary duties as required by the principal’s lifestyle and the law. For instance, a financial agent will have to file and sign taxes each year. This can be quite an extensive process if the principal has a number of investments. Obviously, an agent should be able to balance a budget and not overspend. Agents who make poor financial decisions with a principal’s funds may be held accountable depending upon the extent of their error, as well as the perceived intent.
- Medical agents can keep specific people away from the principal if the agent feels the other person would make life difficult for the principal.
What Are a Power of Attorney Agent’s Limitations?
It might sound as though the power of attorney gives all the rights and responsibilities of the principal to the agent. This is not quite the case. In fact, agents have plenty of limitations.
- Agents are not able to act in accordance with their own wishes. Instead, every action they take must be in the interests of the principal, even if those interests do not dovetail with their own. This keeps an agent from draining a principal’s bank account, at least in theory.
- Agents are not able to make changes to the living trust or will of the principal.
- Agents cannot give their position to someone else, such as a spouse or sibling. They have the right to decline being an agent, but only a principal or the courts can name an alternate agent.
- Agents do not get to make any more decisions when the principal passes away. Upon death, powers of attorney become void.
When to Create Powers of Attorney Documents
The best time to call an estate planning attorney in Arizona to talk about creating powers of attorney documents is before anything happens to the principal. That way, the papers will be in place, just in case.
If you are looking for a knowledgeable attorney to help you create and sign a durable power of attorney for medical, mental health, or financial purposes or any other estate planning legal documents, please feel free to contact the Phoenix area Law Offices of Paula Hannah, PLC.