Power of Attorney
This article was written by attorney Meredith L. Williamson for OSB Legal Links.
Who will manage your financial matters if you become seriously ill, disabled, or injured and cannot handle them for yourself? Many people expect that a spouse or other family member automatically has the power to help with financial matters, but this is not true. Under Oregon law, someone must have special authority to act for another person. You accomplish this through a written document authorizing another person to act on your behalf. You must sign the document before you are incapacitated. Once you have lost the ability to understand and manage your own affairs, you can no longer authorize someone else to handle them for you.
A power of attorney is the most commonly used document granting financial authority to another person. A power of attorney gives someone else, called an agent, the right to make financial decisions about the matters you specify in the document. If you limit the power to certain decisions, the document is a specific power of attorney. If you do not limit the power you give to your agent, the document is known as a general power of attorney. You may sign a specific power of attorney at the bank to give an adult child the authority to make deposits and write checks on a specific bank account. You can use general power of attorney to authorize another person to handle a wide range of matters including banking, buying and selling property, and making investments on your behalf. The document itself states whether the powers it authorizes are specific or general. You can make the power of attorney temporary if, for example, you are going to be out of the country and want an agent to handle your affairs when you are gone.
If the power of attorney does not contain an ending date, the law assumes it is “durable.” That means the authority does not end, even if you are incapacitated. A durable power of attorney is useful when the person who authorized it later becomes unable to handle his or her own business affairs; the agent simply takes over the decision-making.
By giving your agent power of attorney, you are not giving up the power to continue conducting the transactions yourself while you are able to do so. You can end the agent’s authority by revoking the authority in writing. All powers of attorney end upon your death.
A power of attorney generally becomes effective when you sign the document. Oregon law also specifically allows powers of attorney that take effect at the time other than when signed. You can give a specific date when it will go into effect, list a particular event that would cause the power to be effective, or describe a situation when the power could be used. This type of power of attorney is called a “springing” power because it springs to life only if the event outlined in the document comes to pass. If you prefer to give an agent power in the future if you become unable to handle your affairs due to incapacity, you can also say who will determine if you have become incapacitated, such as one or more doctors or the court.
Forms for powers of attorney are available from many sources. This is both good and bad. It is easy to buy an inexpensive form from a stationery store or find one on the internet. Without a lawyer’s advice, it can be risky to sign a document you do not understand and that might not meet your needs. It is important to understand that the agent named in the power of attorney can make decisions with serious financial consequences in all the areas listed in the document. Also, that person will have no authority to act in any areas not listed. A printed form may include too much power or too little power, depending on your individual circumstances. In addition, a power of attorney can be abused. Dishonest people may use this type of document to get control of your money or property. For this reason, it is advisable to speak to a lawyer if you plan to sign a power of attorney. The lawyer can help you decide what is needed. The lawyer may suggest the use of a printed form, perhaps adding language to limit or expand the powers in the form; or the lawyer may suggest a custom document. In more complicated situations, the lawyer may offer additional options such as a trust.
Other Uses for These Tools
Powers of attorney can be useful for students or military members or others who expect to be out of the area or even out of the country, and for parents away from their children temporarily. Conservatorships and guardianships can be created over minor children and their property, too. In those cases, different rules and procedures apply than the ones for adults described in this topic. You will want to talk with a lawyer about these situations.
Legal editor: Meredith L. Williamson, August 2019