“Power of attorney” is one of those terms everyone has heard of, but few understand the powers of. A power of attorney (POA) document allows a specifically named and trusted individual to handle certain matters for you, including depositing bank checks, filing taxes, or even selling or mortgaging a home. The individual granted the POA is sometimes referred to as an agent or attorney-in-fact.
There are different types of power of attorneys possible in Ohio. Two popular forms related to estate planning include a POA for finances which covers financial and business matters and a POA for health care which covers medical decisions made on your behalf.
The POAs for finances and health care are referred to as “durable” POAs since they continue to function should you become incapacitated. It’s generally considered a good idea to consider having these to prepare for the unexpected.
A power of attorney document must meet two critical requirements to be recognized in Ohio.
Someone of sound mind can only create a power of attorney. Ohio courts have ruled that the mental ability required to form a POA is the same as the mental capacity needed to sign a contract. This is a more strict standard than that required for composing a will.
The nature, breadth, and extent of the transactions covered by a POA must be understood. If there is any question as to whether or not the soundness of mind meets legal requirements, it’s recommended that a lawyer be called in to help with the legal assessment.
Although getting your POA notarized is not technically required in Ohio, it is highly advised. If a POA is signed in the presence of a notary public, that makes it more acceptable to financial institutions and others, even if state law does not explicitly mandate it.
Legally, any capable adult can stand to act as an agent. That said, an individual’s reputation, reliability, and geographical region should also be considered.
Although Ohio permits the appointment of co-agents who can function concurrently, it’s typically best to use only one agent to reduce the likelihood of conflicts. Just the same, it’s recommended that a “successor” agent be selected to serve as an alternative if the initial choice for POA is not available.
To establish a POA, Ohio provides a statutory form created by the state legislature with blanks to fill in. A POA can also be made with the assistance of a qualified attorney. In addition to wills or living trusts, many estate attorneys may incorporate a durable POA as part of a larger estate plan. In Ohio, a POA is considered stable unless it clearly states that it ends should the creator of the POA become incapacitated.
The process of establishing a POA can either grant an agent broad powers or certain select powers. Some areas to consider for select powers include banking, real estate decisions, stocks and bonds, business operations, taxes, retirement plans, and benefits.
After drafting the POA, it should be notarized and stored in a safe place that is known and accessible to loved ones. Of course, the agent should be given a copy to familiarize them with its contents. Still, it’s often a good idea to ensure that the agent can access the original power of attorney document if needed.
If your POA allows your agent to make decisions regarding real estate property, a copy of the POA should also be filed with the lands records office in the county where the real estate is owned or will be in the future. Once on file, the recorder’s office can recognize the agent’s authority to sell, mortgage, or transfer real estate on behalf of the POA’s creator.
In addition, banks, utilities, and other institutions the agent expects to deal with should also receive copies of the durable financial POA. Doing this will help to reduce any problems in enacting powers granted. It’s an excellent idea to do this sooner than later with financial institutions as they can be very rigid when accepting a POA’s validity. Submitting promptly can address any issues before more serious problems arise.
Power of attorney automatically ends at death. Following someone’s passing, an individual’s estate plan, either through a will or trust, takes over.
A durable power of attorney also terminates when:
If you feel that establishing a POA will best serve your needs and the needs of your loved ones, the knowledgeable legal team at Heban, Murphree & Lewandowski, LLC are ready to assist you.
Call today to schedule a free consultation to learn more about POAs, estate planning, and other essential legal services. 419.662.3100