A power of attorney is a legal document giving another person (your “attorney-in-fact”) the legal right (powers) to do certain things for you. What those powers are,depends on the terms of the document. A power of attorney may be very broad or very limited and specific. All powers of attorney terminate upon the death of the maker, and some may terminate when the maker (principal) becomes incapacitated (unable to make or communicate decisions). A “Durable Power of Attorney,” however, is effective even in the event of incapacity and is what we typically recommend to our clients.
Unfortunately, not all banks and financial institutions accept powers of attorney. Some institutions accept only powers of attorney using their own company-specific forms or those forms approved by their legal department. Planning in advance and coordinating with the specific financial institutions is essential to make sure the power of attorney will be recognized when it really matters.