In Washington State a General Durable Power of Attorney (GDPOA) is a document that allows the principal to provide authority to an individual, known as an agent or attorney-in-fact, to manage personal finances and assets in the event that the principal is unable to do so due to incapacity (See State of Washington Statue RCW 11.94). This could happen due to an illness or a serious accident.
Should someone become unable to manager their own personal finances, an attorney-in-fact can have the legal authority to the following:
- Pay bills
- Cash checks
- Collect debts
- Prepare and file tax returns
- Manage personal property and real estate
- Bring legal actions on behalf of the principal
- Apply for social security benefits or other public benefits
- Manage bank and investment accounts
- Hire financial, accounting and legal professionals
- Nominate a guardian for the principal in the event the power of attorney is challenged
- Can designate guardian or 3rd party custodian for minor children of the principal
Selecting an Attorney-in-Fact
An attorney-in-fact should be someone trusted by the principal to manage personal finances. They should also be organized and able to attend to the important details of managing the personal and business affairs of the principal. An attorney-in-fact must keep records of all financial transactions and uphold their fiduciary responsibility to act in the principal’s best interest.
When preparing their GDPOA many clients select their spouse, an adult child, another family member or a close friend. The principal can name two or more individuals as co-attorneys-in-fact and they can act together to handle financial affairs. In Washington State there are professional fiduciaries who can serve as attorney-in-fact for a reasonable fee. It is critical to name a back-up or an alternative attorney-in-fact should the nominated agent be unable or unwilling to perform their duties.
A General Durable Power of Attorney can also name an agent or attorney-in-fact for health care and/or medical decisions. This authority allows for management of medical care and treatment and works together with a Health Care Directive (aka Living Will) for end of life decision making.
Limited or Special General Durable Power of Attorney
A special or limited durable power of attorney can be executed by a principal for a specific transaction, time period or other limited purpose. GDPOA may be revoked by the principal and automatically terminates when the principal dies. It is not a substitute for a Last Will and Testament. In the event of the principal’s death, their Will is the sole document determining decision making power.
What if you do not have a General Durable Power of Attorney?
If you have not prepared a GDPOA and you become incapacitated, it will be too late for you to name an attorney-in-fact. It may be difficult for your finances to be managed and the court may have to appoint a guardian. This process can be intrusive and expensive.
Practical Planning, Sensible Solutions
It is important to discuss the details of your estate planning with your loved ones as well as your personal and estate planning attorney to create a practical plan to manage your affairs. Having a plan in place will give you peace of mind.
For over 20 years Michael J. Longyear has helped clients prepare their personal and estate plans. Start your estate planning today. You can reach Michael at (206) 624-6271.
