3 Basics You Gotta Know About Power of Attorney

I've been practicing as a Louisiana estate planning attorney for 26 years, and I've run across my fair share of Power of Attorney "issues."

The following are three things pretty much everyone with assets needs to know so that there estate is in order:

(1) Only Effective During Lifetime. Some people think it will be easy for their "Agent" named on their Power of Attorney to transact for them after they are gone. Parents sometimes come into my office to discuss their estate planning, and they say something like, "I gave my son Power of Attorney, so if I die, he can transact all of my accounts, sell my house, and sell my car." 

Not so fast Mom! Under that example, when Parent dies, Parent's power of attorney ceases to have any effect. Your power of attorney dies when you die - no exceptions!

(2) Certain Powers Must Be Express. In Louisiana, as in other states, certain things that your Agent may have to do for you must be EXPRESSLY stated in the power of attorney instrument. It's not good enough to say that your Agent can do anything that you could do.

(3) Third Parties Don't Have To Honor It. One brokerage firm told a client, "We only accept Powers of Attorney that were prepared by OUR brokerage firm. We won't accept any power of attorney prepared by a lawyer. One bank told another client that they won't accept any power of attorney that is more than five years old. Another bank lawyer from Texas once told me, "We don't like it when two people are designated to work together on a power of attorney, so we are refusing to honor it."

So, you have to have a "Plan B" when it comes to setting up your legal affairs so that trusted loved ones can transact for you when you can't or when you have passed away. And with people now living longer, this "Incapacity Planning" can be just as important as the "Death Planning."

Paul Rabalais
Louisiana Estate Planning and Administration Attorney
Paul@RabalaisEstatePlanning.com
Offices: Anywhere in South Louisiana