Through a quick Google search, it is easy to find “fill in the blank” Power of Attorney forms being provided by numerous sources, such as “do it yourself” guides or cheap and seemingly “easy” online options. The sources make it seem as though it is easy to complete a power of attorney yourself at little or no cost. However, the preparation of Powers of Attorney are best left to a licensed attorney who can not only “fill in the blanks” properly, but also can also advise regarding the legal effect, possible tax consequences, execution and delivery of the Power of Attorney document. If not done correctly, an executed Power of Attorney may leave the Principal (party having the Power of Attorney drafted) without the benefit of certain statutory protections or may grant improper powers to the attorney-in-fact.
A properly executed Power of Attorney is not only an incredibly important document that offers protection to individuals who may need someone to manage their financial affairs due to incapacity or inability, but it is also an extremely powerful document. If not drafted correctly, it could not provide the full protection it is capable of, or could leave the Principal vulnerable to potential financial exploitation or abus
While Power of Attorney documents may appear to be simple and self-explanatory, preparing one is a job best left to a licensed attorney. Here is why:
- Capacity. If the Power of Attorney document does not specify that it is to continue in the event of incapacity of the principal, its effectiveness is greatly reduced. Accordingly, it may not be able to be utilized as it was intended at a time when it is needed most.
- Execution. The document must be properly executed in order for it to be valid. In retaining an attorney to draft your Power of Attorney, they will generally ensure it is executed properly along with preparing the documents.
- Recording. In order for a Minnesota Statutory Power of Attorney document to be effective, it must be properly acknowledged and include a draftsman’s statement. If either of these elements are missing, it will not be recordable in the county real estate records which will prevent an attorney-in-fact from executing a deed on behalf of the principal.
- Powers Granted. Powers granted to an attorney-in-fact are vast and allow the individual access and control over the principal’s finances in certain situations. It is extremely important that individuals executing these documents fully understand how the document works, as well as the powers it is granting. It is also important to consult with an attorney as to what to do with the document in the time after it has been created and before it is needed by the attorney(s)-in-fact.
- Protection from Abuse. There are numerous cases of prosecution of attorneys-in-fact who have misused their authority under a Power of Attorney for their own improper financial benefit. Attorneys are aware of warnings signs for potential abuse and, when working with clients, make certain to have lengthy conversations regarding choices made for named attorneys-in-fact. Attorneys can also advise as to what powers an individual should or should not grant based on their specific concerns or goals regarding the Power of Attorney document.
- Conservator Proceedings. If a Power of Attorney is deemed ineffective and the attorney-in-fact is unable to handle matters with the principal is incapacitated, a Conservatorship proceeding may be necessary. Conservatorship proceedings are both time consuming and involve a sizeable expense. It is not unheard of for Conservatorship proceedings to become necessary where a Power of Attorney form was drafted improperly and not effective in allowing the attorney-in-fact to convey real property. In comparison to a Conservatorship proceeding, the cost of hiring a licensed attorney to properly prepare a Power of Attorney is miniscule.
Schromen Law, LLC is experienced in preparing and executing Minnesota Statutory Power of Attorneys. I make certain to explain the Power of Attorney document to my clients, including what powers will be conveyed and how to safe-keep the document after it is complete. I ensure that execution is done properly. I am also available to clients, or their named attorneys-in-fact, should they have questions in the event the Power of Attorney needs to be used.