We often find that many of our clients have either created a Power of Attorney in the past or have been named as an Agent. While creating and using a Power of Attorney in NC can be straightforward, this perceived simplicity can lead to mistakes or misuse. To help protect you and your assets, we’ll explain some North Carolina Power of Attorney basics. We’ll also highlight common mistakes to avoid when executing or using a Power of Attorney.
What Is a Power of Attorney in NC?
A Power of Attorney is a legal document that allows you (the “Principal”) to grant another person (the “Agent”) the authority to act on your behalf in legal matters and transactions. The type and extent of this authority depend on the type of POA you execute. Not understanding the extent of authority granted in a POA is a common and potentially dangerous estate planning mistake.
General vs. Limited Power of Attorney
A Power of Attorney can be general or limited. A general POA grants your Agent almost unlimited power to act on your behalf. This may include withdrawing funds from your financial accounts, entering into contracts in your name, and selling property and assets you own. Although the law places some limits on an Agent with a general POA, you should assume they have virtually unlimited power. Choose an Agent you trust to behave in your best interest.
A limited POA grants your Agent specific, limited authority detailed in the POA. For example, you might grant an Agent the power to act on your behalf during the sale of your home while you are traveling. Parents of a minor child often use a limited POA to allow a caregiver to consent to medical care in an emergency.
Special Types of Power of Attorney in NC
All Powers of Attorney are either general or limited; however, some special types of POAs can apply to either.
Springing Power of Attorney
A Springing POA contains language that causes the Agent’s authority to “spring” into action at a specific time or event. For example, you might create a general POA that only takes effect if you are missing for a set period or have been declared incapacitated by a physician.
Durable Power of Attorney
Historically, an Agent’s authority under a POA automatically ended upon the death or incapacity of the Principal. The risk of incapacity is a common reason for executing a POA. The “durable” POA address this issue. When a POA is durable, the Agent’s authority continues if the Principal becomes incapacitated. In North Carolina, a POA is presumed durable unless the document clearly states otherwise.
Power of Attorney for Health Care
Even a general POA typically does not allow the Agent to make health care decisions for the Principal. To grant this authority, you need a Power of Attorney for Health Care. This is an advanced directive that allows an Agent to make health care decisions if you are unable to do so yourself.Do You Have Questions about a North Carolina Power of Attorney?
If you have questions or concerns about an NC Power of Attorney, please contact us at Clarity Legal Group. You can reach us by calling 919-484-0012 or contacting us online.
