A Power of Attorney (POA) is a legal document that allows you (the “principal”) to appoint someone you trust (the “agent” or “attorney-in-fact”) to make decisions on your behalf. These decisions can relate to your finances, healthcare, property, or other matters. The authority granted through a POA can be broad or limited, depending on the type of POA and your specific needs.
Having a Power of Attorney in place is crucial for estate planning, as it ensures that someone you trust will manage your affairs if you become incapacitated. Without a POA, your loved ones may need to go through the lengthy and costly process of obtaining a conservatorship to manage your affairs.
Establishing a Power of Attorney (POA) or Durable Power of Attorney (POA) is an essential step when planning for the future. It ensures that your personal, financial, and healthcare decisions are managed according to your wishes if you become unable to make them yourself. In Tennessee, the laws surrounding POA can be complex, and selecting the right type of POA for your needs requires careful consideration.
At Douglass & Runger, we are experienced in Estate Planning and Elder Law, offering personalized legal guidance to help you and your loved ones prepare for the future. Whether you’re seeking to establish a Power of Attorney or need help understanding your duties as an agent, our experienced Memphis-based attorneys are here to assist you.
Types of Power of Attorney
Tennessee has several types of Power of Attorney, each serving a different purpose. Here’s a breakdown of the most common types:
Durable Power of Attorney
A Durable Power of Attorney remains in effect even if you become incapacitated. This type of POA is often used for financial and legal matters, giving your agent the authority to manage your finances, pay bills, and make other important decisions if you are unable to do so.
Medical Power of Attorney
Also known as a Healthcare Power of Attorney, this type of POA allows your agent to make medical decisions on your behalf if you are unable to communicate your wishes. This is crucial for ensuring that your healthcare preferences are followed, especially during critical situations.
Limited Power of Attorney
A Limited Power of Attorney grants your agent authority over specific matters or for a limited period of time. For example, you might use a Limited POA to allow someone to manage a real estate transaction while you are out of the country.
Business Power of Attorney
If you own a business, a Business Power of Attorney allows you to appoint someone to manage your business operations in your absence. This can include signing contracts, making financial decisions, and handling other important business matters.
Irrevocable Power of Attorney
An Irrevocable Power of Attorney cannot be revoked once it is signed. This type of POA is less common and typically used in specific situations where you want to grant permanent authority to your agent.
Lasting Power of Attorney for Health and Welfare
This POA allows your agent to make decisions about your personal care, living arrangements, and welfare. It’s often used alongside a Healthcare POA to cover all aspects of your care.
Living Will vs. Power of Attorney
A Living Will outlines your wishes for medical care if you are unable to communicate, but it does not appoint an agent. A Healthcare POA, on the other hand, appoints an agent to make those decisions. Both documents are often used together in estate planning.
How to Establish a Durable Power of Attorney in Tennessee
Setting up a Power of Attorney in Tennessee involves several key steps:
- Choose the Right Type of POA: The first step is deciding which type of Power of Attorney is right for your situation. This depends on your specific needs, whether they are related to financial, medical, or business matters.
- Select a Trusted Agent: Your agent should be someone you trust to act in your best interests. This could be a family member, a close friend, or a professional such as an attorney.
- Prepare the POA Document: The POA document must be drafted according to Tennessee state laws. This includes outlining the specific powers you are granting to your agent and whether those powers are broad or limited.
- Sign and Notarize the Document: In Tennessee, a POA document must be signed by the principal and either notarized or witnessed by two people. This step is essential to make the document legally valid.
- File the Document (if necessary): Depending on the type of POA, you may need to file the document with the court or other institutions. For example, if your POA grants authority over real estate transactions, it may need to be recorded with the county recorder’s office.
The process of establishing a Power of Attorney can be complex, and it’s important to get it right. At Douglass & Runger, our experienced estate planning attorneys can guide you through every step, ensuring that your POA is properly drafted and legally enforceable.
Power of Attorney vs. Other Legal Arrangements
When planning for the future, it’s important to understand how a Power of Attorney compares to other legal arrangements, such as conservatorship and guardianship:
Conservatorship vs. Power of Attorney
A conservatorship is a court-appointed role where someone manages the affairs of an incapacitated person. Unlike a POA, which is established voluntarily by the principal, a conservatorship is imposed by the court. Setting up a Durable POA in advance is often the better option if you want to avoid the court process.
Guardianship vs. Power of Attorney
Guardianship is similar to conservatorship but typically involves managing the personal care of a minor or an incapacitated adult. In contrast, a POA is broader and can be used for both financial and personal matters, depending on the type.
Choosing between these options can be challenging. Our attorneys at Douglass & Runger can help you weigh the pros and cons of each arrangement to determine the best solution for your unique situation.
What is the Cost of a Power of Attorney in Tennessee?
The cost of establishing a Power of Attorney can vary based on several factors, including the complexity of the document and the attorney’s fees. Common costs include:
Attorney Fees: Working with an experienced attorney is essential to properly drafting your POA. At Douglass & Runger, we offer transparent and affordable pricing for our estate planning services.
Filing Fees: Some types of POA documents may require filing with government offices, which may involve additional fees.
If you’re concerned about the cost, our team at Douglass & Runger can provide you with a clear breakdown of all expenses upfront, so there are no surprises.
Power of Attorney Responsibilities and Duties
As an agent under a Power of Attorney, you have significant responsibilities to act in the principal’s best interests. Your duties may include managing finances, making healthcare decisions, and ensuring that the principal’s wishes are followed. It’s important to understand that being an agent comes with legal obligations, and failure to fulfill these duties could result in legal consequences.
Some common responsibilities include:
Managing Finances: This may involve paying bills, managing bank accounts, and handling investments.
Making Healthcare Decisions: If you have a Medical POA, you will need to make decisions about the principal’s medical treatment based on their wishes and best interests.
Filing Reports: In some cases, you may be required to file reports with the court or other institutions detailing how you have managed the principal’s affairs.
If you’re unsure of your duties as an agent or have been appointed as a Power of Attorney and need guidance, Douglass & Runger can help you navigate your responsibilities and ensure that you are fulfilling your legal obligations.
