A will is one of the best-known estate planning documents, but it usually does nothing for you while you are alive. A financial power of attorney can be useful long before an estate is opened. It allows another person to handle financial or property decisions when needed. A Virginia estate planning lawyer can help you decide what authority to give and who should receive it.
What Does a Power of Attorney Actually Do?
A power of attorney lets you, as the principal, name an agent to act for you. Depending on the document, the agent may be able to manage bank accounts or pay bills. The agent may also handle real estate or business interests.
Virginia law gives people broad flexibility when creating these documents. A power of attorney can grant general authority over certain subjects or give an agent narrower authority for specific tasks. Some powers, however, must be expressly stated in the document. For example, authority to make gifts or change certain beneficiary designations cannot simply be assumed.
The agent also has legal duties. An agent who accepts the role must act in good faith and within the authority granted by the document.
Why Can a Power of Attorney Be More Useful During Your Lifetime?
A will generally controls what happens to property after death. A power of attorney works during life. That difference becomes important if an illness or injury leaves someone unable to manage financial affairs.
Without the right document, family members may have difficulty paying bills or handling property on that person’s behalf. In some cases, they may have to ask a court to appoint a conservator. A properly prepared power of attorney may allow an agent to step in without that additional court process.
A power of attorney can also help when incapacity is not involved. Someone who is traveling or temporarily unavailable may want an agent to complete a particular financial transaction.
What Does “Durable” Mean in Virginia?
Under Virginia law, a power of attorney drafted under the Virginia Uniform Power of Attorney Act is durable unless it explicitly says it is terminated by incapacity. “Durable” means the document continues despite the principal’s incapacity.
This is an important feature for estate planning. Many people create a power of attorney because they want someone they trust to manage financial affairs if they can no longer do so themselves.
A Virginia estate planning lawyer can also help decide when the authority should begin. Under Virginia law, a power of attorney is generally effective when implemented unless the document states it will take effect later or upon a specific event.
Does a Power of Attorney Cover Medical Decisions?
A financial power of attorney should not be confused with an advance medical directive. Virginia uses advance directives to authorize an agent to make health care decisions under the circumstances set out by law and the document.
Someone creating an estate plan may need both documents. The financial power of attorney can address money or property. The advance medical directive can address health care decisions. Keeping those roles clear can make it easier for the right person to act when help is needed.
Does a Power of Attorney Still Work After Death?
No. Under Virginia law, a power of attorney ends when the principal dies. At that point, authority over the estate generally shifts to the executor named in the will once that person is qualified or to another personal representative appointed through the estate process.
That is why a power of attorney does not replace a will. The documents do different jobs at different times. A power of attorney helps during life. A will helps direct what happens after death.
When Should You Review Your Power of Attorney?
A power of attorney should not be signed and forgotten. Relationships can change. An agent who seemed like the right choice years ago may no longer be available or suitable. Financial circumstances can change too.
It is also important to review the document after divorce or another major family change. Unless the document provides otherwise, Virginia law can terminate a spouse-agent’s authority when certain family-law proceedings are filed.
Brandon Davis, Esq. can help you review how a power of attorney fits with the rest of your estate plan. If you do not have one or your current document is years old, speak with a Virginia estate planning lawyer about whether it still gives the right person the right authority. Fill out the online contact form or call Brandon Davis, Esq. at (540) 425-8278 to discuss your plan.
