What is a POA and Who is Entitled to One?
A power of attorney can be an important part of an estate plan, but there are specific things to know when creating one.
A power of attorney (POA) is a very important tool that is included in many estate plans. A POA will allow another person to assist with your financial matters in the event you are unable to (and in other circumstances, too, if you want that); and a POA will allow another person to assist you with your medical matters in the event you ever become incapacitated and cannot make decisions for yourself. Almost every adult is entitled to create a power of attorney for either financial or medical matters, but in order for the power of attorney to be valid, there are some requirements to be met. An attorney can draft this document for you, so it provides the authority and the protection you need.
The Different Types of POAs in Tennessee
There are two main types of POAs in Tennessee. These are financial and health care POAs. A financial power of attorney will give another person the authority to sell your home, deposit money into your bank account, file your taxes, and more. The person designated to have the power under a POA is formally known as the attorney-in-fact.
A health care power of attorney will allow someone else to make medical decisions on your behalf if you are ever unable to make them on your own. In Tennessee, a health care POA will usually also include the provisions of a living will. The person designated to have the power under a health care POA is formally known as the agent. There is also the option in Tennessee to complete an Advance Care Plan, which includes a very basic designation of an agent for making health care decisions and provisions of a living will and directions for other medical situations.
Legal Requirements for Power of Attorneys in Tennessee
For a power of attorney to be valid and, therefore, legally enforceable in Tennessee, there are some legal requirements.
First, for all powers of attorney, the person signing must have the necessary mental capacity to sign. This means that the person must have the mental capacity required to enter into a contract. The person signing does not necessarily have to have an ability to act with judgment and discretion, but they must reasonably know and understand the nature of the power of attorney and the consequence of signing. Whether a person had the necessary mental capacity to sign is open to interpretation by the courts. For this reason, it may be important to consult an attorney when needing a power of attorney.
In order for the power of attorney to be effective once the signer becomes disabled or incapacitated, the POA needs to be in writing, and it also needs to contain the words “This POA shall not be affected by subsequent disability or incapacity of the principal” or “This power of attorney shall become effective upon the disability or incapacity of the principal” or similar words.
In addition, for a health care power of attorney to be effective, it must be signed by the principal (i.e., the person making the POA) and at least two witnesses, and have a notarized clause attesting that the witnesses are not the agent; are not related by blood, marriage, or adoption; are not entitled to any portion of the estate of the principal under any will or codicil; are not a health care provider for the principal, or an employee of the treating health care provider; and are not an operator of a treating health care institution, or an employee of the operator of a treating health care institution. These same requirements apply to a living will.
For a financial power of attorney, typically known as a durable general power of attorney, it is commonly understood that the document must be notarized. Most financial institutions will not recognize a power of attorney unless it has been notarized. Notarization helps to authenticate the POA so there is no question about its validity.
While there are many different forms and templates you can use when creating your power of attorney, it is always recommended that you enlist the help of an estate planning lawyer. An attorney will know how to draft the document and can also advise on who to name as your agent in order to give specific authority to the agent and carry out your intentions.
I am an Estate Planning Lawyer in Brentwood Who Can Draft Your POA
A power of attorney can be a source of valuable assistance in the event you are ever unable to make decisions on your own. You need help creating one, though. I am Judy A. Oxford, a Brentwood estate planning lawyer who can draft your POA and make sure it is properly executed so it provides the authority and the protection you are hoping for. Call me at 615-791-8511 or contact me online to schedule a free brief initial consultation.