Durable Powers of Attorney

A power of attorney is a written document that gives another person the authority to act on your behalf. The person signing the document, or "principal," appoints another person as an agent. The agent is also called an "attorney-in-fact," which is different than an attorney at law.

A power of attorney can give either broad or limited powers to the attorney-in-fact. For example, a limited power of attorney might be drafted to allow a wife to sign legal documents for her husband while he is out of town. A power of attorney can also be designed to survive the incapacity or mental incompetence of the principal.

Massachusetts has specific statutes that govern written powers of attorney. These statutes provide that no "magic" language or "legalese" is required to create a valid power of attorney, and that a variety of wording or form may be used. However, since specific language is given in the statute, the safest course is to use that express language.

The statutory power of attorney in Massachusetts states that the powers granted to the attorney-in-fact are "broad and sweeping." The statute confers at least the following powers to the attorney-in-fact:

To lease, purchase, exchange, and acquire real property.

To lease, purchase, exchange, and acquire personal property.

To bond, share, and commodity transactions.

To make banking transactions.

To have access to safe deposit boxes and vaults.

To conduct any business operating transactions.

To exercise or perform insurance transactions.

To do all acts necessary for maintaining the customary standard of living of the principal.

To prepare any social security or unemployment insurance documents.

To execute vouchers for military service benefits.

To prepare any and all types of tax returns and documents.

To employ agents such as legal counsel, accountants, or other professionals.

A regular power of attorney is no longer effective if the principal becomes incapacitated or mentally incompetent. In addition, powers of attorney terminate at the death of the principal. A power of attorney can also be restricted by language that the power terminates on a specific date.

DURABLE POWER OF ATTORNEY

A standard power of attorney is no longer effective if the principal becomes incapacitated or mentally incompetent. However, Massachusetts statutes provide for a power of attorney which survives incapacity and mental incompetence. Such a power of attorney is known as a "durable power of attorney."

A durable power of attorney must include language indicating that the power of attorney will not be affected by the subsequent incapacity or mental incompetence of the principal. The attorney-in-fact of a durable power of attorney must keep full and accurate records of all transactions on behalf of the incapacitated or mentally incompetent principal.

CONCLUSION

Any standard or durable power of attorney can contain provisions relating to appointment, resignation, removal and substitution of the attorney-in-fact. The easiest way to terminate an unrecorded power of attorney is to destroy all copies. If the power of attorney has been recorded with the Register of Deeds, an instrument of revocation must be executed and filed. A durable power of attorney also terminates if all attorneys-in-fact named in the instrument or substituted die, or become incapable of acting.

In addition to standard and durable powers of attorney, Massachusetts statutes provide for health care powers of attorney. Such an instrument authorizes another person to make decisions on giving, withholding, or withdrawing consent to medical treatment for a principal. Health care powers of attorney will be discussed in a subsequent article.

Like wills, powers of attorney are important documents that most individuals should have. Although usually short and simple, the great power of such a document should not be overlooked. A recent Wall Street Journal article noted that a power of attorney given to the wrong person is "a license to steal." Make certain that the person you select as attorney-in-fact can be trusted with your possessions and to act in your best interests.