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Powers of Attorney and their Place In Your Estate Plan


A detailed look at powers of attorney - what they are, what you need to know about them before you decide to create one.

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   A Detailed Look at Powers of Attorney,
  What They Are, What You Need To Know
About Them Before You Decide to Create One

               GEOFFREY GARRETT
         Washington Estate Planning Attorney
A good estate plan includes a handful of essential tools and documents. Whether you are a
young person creating your first estate plan, an unmarried couple, or someone close to
retirement, incorporating a power of attorney into your comprehensive plan is always a good
idea. In fact, most estate plans use two powers of attorney, and in some situations, you might
have even more than that.

But the term “power of attorney” is not one that most people know a lot about. Like other
legal concepts, a power of attorney has a specific purpose and meaning. Your estate planning
lawyer will be able to explain in more detail what powers of attorney are and why they are
important, but here is what you need to know about them before you decide to create one.


The most common questions estate planning lawyers get about powers of attorney usually
have something to do with the term “attorney.” Despite its name, a power of attorney has
nothing to do with practicing law as a lawyer. Though you should talk to a lawyer if you want
to create a power of attorney, the document itself has little to do with lawyers.

A power of attorney is a legal document. Through this document you get to choose someone
who will act as your representative. That representative, known as your agent or your
attorney-in-fact, has the ability to do whatever you allow him or her to do.

For example, you can give your attorney-in-fact the right to buy or sell real estate or enter you
into contracts.

You can choose anyone you wish to act as your attorney-in-fact. That person, even though
you are using a power of attorney and they earn the title of attorney-in-fact, does not have to
be a lawyer nor does being named as your agent allow that person to practice law.

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Even though powers of attorney are very flexible, most people create two main types.

      Financial. A financial power of attorney gives the agent specific decision-making
       abilities about your finances. Whether you want your bank to be able to pay your bills
       for you or give someone the ability to manage your business while you’re on vacation, a
       financial power of attorney is solely concerned with giving your agent the ability to
       manage your property or financial concerns.
      Healthcare. If you want someone to talk to your doctors, review your medical records,
       and make health care decisions when you can no longer do so, you need a health care
       power of attorney. Like financial powers of attorney, health care powers grant your
       agent the ability to make specific types of choices.


An agent can act on your behalf or make decisions for you as long as you allow that person to
do so. When a principal—a person who creates a power of attorney—gives an agent authority
that principle can revoke that authority whenever he or she likes.

For example, let’s say you create a financial power of attorney and give your brother the rights
to sell your share of the family home. Several months go by and nothing happens. Not only
has the home not sold, but your brother has not kept you informed about his efforts to find a
buyer. If you want to obtain a new agent to sell your property interest, you can effectively fire
your brother and terminate his authority as your attorney-in-fact. You are then free to find
someone else to act as your agent.

Powers of attorney also end when you, the principal, become incapacitated. An incapacitated
person is someone who no longer has the ability to make his or her own decisions. Your agent

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can only make decisions that you are capable of making. When you become incapacitated you
lose your ability to make choices. Therefore, your agent loses this power as well.

But there is one key exception to the automatic termination of the agent’s authorities under
your power of attorney. If you create a durable power of attorney the agent can still act even
if you become incapacitated. Durable powers are very popular, for example, when you want
someone to manage your affairs if you are suffering from serious illness or injury.


There are many types of power of attorney. In addition to the broader categories of financial
and health care powers, there are other types of powers you can convey.

      General. When you convey a general power of attorney you give your agent the
       broadest possible decision-making abilities. These powers allow an agent to do almost
       anything you can do, with some minor exceptions.
      Limited. A limited power of attorney is the opposite of a general power because it only
       conveys specific rights to the agent. For example, all health care and financial powers
       of attorney are limited powers because they only allow the agent to make certain types
       of decisions.
      Springing. In some situations you might not want to give away any of your decision-
       making abilities until you are no longer able to do so, or until a certain event takes
       place. A springing power of attorney is one that only takes effect once specific
       conditions have occurred. You might use springing powers, for example, to give
       someone the ability to make health care decisions only after you have become

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There are many reasons why a person might want to create powers of attorney. Regardless of
your specific desires, it’s always best to create these documents as a part of a broader estate
plan. There are many pieces of an estate plan that involve choosing someone else to represent
you or your interests. Creating these pieces, such as a power of attorney, in conjunction with
other important elements is essential to ensuring that you create a plan that operates as
smoothly and efficiently as possible.

Byrd Garrett PLLC | Powers of Attorney and Their Place in Your Estate Plan               5
 Recommended Book
                                            Co-Authored by Attorneys:
                                            Geoffrey H. Garrett and Stanley R. Byrd
                                            with Robert Armstrong and Sanford M. Fisch

                                            An estimated $41 trillion in inheritance will change hands in the next
                                            45 years – yet 75% of families have failed to plan. The world becomes
                                            more complicated by the day, especially in the area of tax and estate
                                            planning. With the ever-changing and confusing tax laws, it is difficult
                                            for you to know what type of planning is most appropriate for your
                                            family. The goal of our new book is to provide families with more
                                            readily available information and equip them to take control over an
                                            area that is often misunderstood. The best part is that the book is
                                            written in a practical, easy to follow question and answer format
                                            instead of technical legalese.

About Geoffrey Garrett

                                                  Byrd Garrett PLLC
                                                  2150 N. 107th St., #501
                                                  Seattle, WA 98133-9009
                                                  Phone: (206) 363-0123

Geoffrey H. Garrett purchased assets of the law practice of Stanley R. Byrd in 2008. For more than twenty-seven years previously, he
pursued two challenging careers simultaneously, as an attorney in an active sole practice and a senior pilot for a major airline, where
he achieved the rank of B-747 captain in the international operation. He was honored as his airline’s 2005 Captain of the Year in
Seattle. He has been a frequent speaker on the subject of reorganizing troubled airlines, has written significant papers about airline
code sharing and fleet restructuring in bankruptcy, and is the co-author with Stanley R. Byrd of Estate Planning Basics in Washington.

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Mr. Garrett advises in matters of estate planning and probate, trust administration, guardianship and planning for special needs,
elder law and asset protection. He assists owners of small businesses with respect to entity formation, administration and
compliance, purchase and sale of businesses and succession planning.

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