Q: Why is a Durable Power of Attorney important for me as a small business owner?
A: A Durable Power of Attorney allows you to name an agent to take care of your personal financial and administrative matters. You may also name a business agent to take care of your business affairs, such as accounts receivable, and deciding whether to continue or wind down your business. There are separate powers of attorney that specifically address professional and confidential business fields such as CPAs or attorneys.
Q: Could you help me understand why I would need a Durable Power of Attorney if I’m married? Whom should I consider?
A: Unless every asset is held jointly, your spouse does not have access to your financial records automatically. This is the document that allows the spouse to attend to assets titled in your individual name. Additionally, if your spouse is unavailable or incapacitated, then you have the opportunity to name a back-up agent to serve this role. Common successor agents are adult children, either individually or as co-agents.
Q: Several financial institutions and insurance agencies have told me they would not accept my Power of Attorney (for my parents) if it’s older than two years old. Can they do that?
A: It depends. There is certain language that needs to be included in the document to entice the third party to accept the power of attorney, due to the Power of Attorney Act, which became effective on July 1, 2010. That said, the Act requires the institution to accept a properly executed power of attorney (with some exceptions) within seven days after it is presented for acceptance. In fact, an institution that refuses to accept a properly executed power of attorney (absent exceptions) is liable for reasonable attorney fees and costs incurred in requiring the institution to accept the power of attorney. For this issue alone, it is worth seeking the review of an existing power of attorney by counsel.
Click here for a detailed explanation of the General Durable Power of Attorney.
Lori K. Murphy Esq. is a shareholder in the Arlington, Va., law firm of Bean, Kinney & Korman P.C. and practices in the areas of estate planning and estate planning administration. She can be reached at 703.525.4000 or at Lmurphy@beankinney.com.