Power of Attorney Explained

hey there i'm paul Rabelais i'm an

estate planning attorney and in this

video i'm gonna talk all about power of

attorney something just about everybody

does hmm often misunderstood so I'm

gonna lay out really 10/10 critical

points that affect people when they

either are creating a power of attorney

or they've been appointed by someone

else who created a power of attorney so

I'm Paul Rabelais estate planning

attorney help our clients all around

Louisiana get and keep their legal

affairs in order so first let me go over

what is a power of attorney so power

attorney is something that just about

everybody does when they're getting all

of their legal affairs in order but it's

a it's an instrument or a legal document

where you give someone else the

authority to transact for you and then

we're gonna you know dig into some of

the details here so I want to give you

ten key points about power of attorney

the first four are gonna be really more

definitions but you need to know the

definitions and then the final six are

really practical things that affect

people when they're creating or trying

to use a power of attorney so point 1 is

just a definition and you know we hear

people come in the office a lot and say

I want I think I want a general power of

attorney so you know what does general

mean and in general in general means

that it's a it's a comprehensive power

of attorney it's a power of attorney

that you create where you designate

someone to be able to do things like pay

your bills and deal with third parties

on your behalf it's you know designed to

be comprehensive so that's what the

general power of attorney is and some

people though they don't want a general

power of attorney they want what we

often call a limited power of attorney

it might say Paul I'm I'm going out of

town for the next three weeks my house

is closing next week I'm not gonna be


I want to appoint my friend Fred to have

power of attorney but I only want Fred

to be able to you know sign for me

at the closing I don't want Fred to be

able to do anything else for me so

that's what's called a limited power of

attorney it's limited in its scope and

its purpose sometimes it has a deadline

so that's that you know power of

attorney that you create for a limited

purpose number three durable power of

attorney what does that mean well a

durable power of attorney means it

remains effective even after you become

incapacitated and quite frankly that's

the main reason why people create powers

of attorney so they can have some

trusted person be able to take care of

things for themselves when they do

become incapacitated oh by the way here

in Louisiana where we are all powers of

attorney are durable even if there's not

that durable language in the power of

attorney for attorney in Louisiana it's

effective until you die and so it's

effective throughout your incapacity

nonetheless some thirty third parties

out there they want to see all that

durable language in there so we put it

in there you know just in case point

number four what is a springing power of

attorney so some people feel like hey

Paul I want my son to have power of

attorney farm for me but while I'm you

know while I got my right mind I don't

want my son to have power of attorney I

don't you know maybe he's he might get

influenced by his wife to do something

stupid so I want my power of attorney

only to become effective when I become

incapacitated while I'm well while I'm

healthy nobody's gonna have power of

attorney for me that's a springing power

of attorney it springs into effect when

you become incapacitated the key there

is clearly defining that standard for

determining your incapacity probably

worth mentioning in this video that

sometimes you know when that person

needs to use it and they've got to meet

that definition and and fulfill you know

the requirements that you're

incapacitated sometimes it's tough for

them to get the doctors to sign those

affidavits that you're incapacitated if

that's the appropriate standard so a lot

of people let's say most people make

their their powers of attorney immediate

as opposed to springing but be aware

that springing exists so there's your

first four definitions general limited

durable and springing now let's get into

some of the practical practical effects

to to fill out kind of numbers five

through ten about power of attorney

explained number five people ask me the

paul paul people ask me the question

Paul if I give this person power of

attorney can they go to the bank and

clean me out well there's a short answer

and a long answer I guess the short

answer is yeah you know you're giving

them the authority to track on to to

transact on your behalf so if you give

them power of attorney they can deal

with your banks and your other financial

institutions now is it is it within the

rules that they do that of course not so

they're bound to do things on your

behalf and by going and and taking the

money out of your bank and using it for

themselves they're they're stealing your

money that's that's theft or whatever

crime you want to call it so can they go

and clean you out yes is that theft yes

so they're bound to do things that are

in your best interest

hence you know appointing the right

people point number six is there certain

language that needs to be power of


some people they come in the office oh

mama gave me power of attorney here it

is I can do whatever it is that they're

needing to do not so fast because there

are certain powers that must be

expressly stated in the power of

attorney for that person to be able to

do those things a few of the common ones

are the power to make donations it must

be expressly stated in the power of

attorney that that person has the power

to make

donations on behalf of the person who

signed the power of attorney the power

to deal with successions the Peyer power

to buy or sell ally or lease a thing and

the power to make healthcare decisions

must be expressly stated in the power of

attorney so now that come of the

practical effect is is some people will

sign to powers of attorney one for

health care matters and one for general

you know financial matters because some

people want different people making the

health care versus the fine financial

decisions it can be one power of

attorney but oftentimes it's done you

know in two different legal documents so

realize there are certain things that

must be expressly stated in the power of

attorney for that person that you

designate to have the authority to do

point number seven Paul can I point two

or more people to have power of attorney

for me so the short answer is yes the

long answer is if you you know if you

appoint two or more people Paul I have

two kids I don't want to offend either

one of them by appointing one of them as

having power of attorney for me

so as since I don't want to offend them

I'm gonna I want both of them to work

together so yes can you do that yes but

the the longer answer is you know many

third parties out there whether it's

banks whether it's brokerage firms they

don't want to have to deal with two

people together acting on your behalf

and sometimes they won't honor that

power of attorney where you stated that

two or more people have to work together

on your behalf to get something done so

oftentimes when we appoint two or more

people often times we say they can act

jointly or separately and that

eliminates all the problems with third

parties honoring that but so just be

aware that that exists point number

eight for what I just said earlier but

worth reiterating third parties can't be

forced to honor your power of attorney

so seeing that before

dad signs a power of attorney appointing


as what we call agent dad becomes


now sons got a deal with dad's business

so son goes to dad's bank and for some

reason bank says we're not gonna honor

it they may say it's too old they may

not like the wording of it there's

something there

where the bank doesn't like it and son

is now stuck because there's no rule

that says son can force the bank to

honor dad's power of attorney and if the

bank doesn't honor it and there's

business that has to be done then son

may have to hire a lawyers go through a

guardianship proceeding and get court

orders that the banks would be required

to honor so again causes some some

difficulty there and so need to know

that ahead of time point number nine

Paul does the power of attorney have to

be recorded does it have to be no but

there may be some instances where third

parties will require that your power of

attorney be recorded and then at the at

the courthouse and then the courthouse

issues what's called certified copies of

the power of attorney that third parties

will rely on because it's just our rule

our power of attorney rules that say

third parties you know can rely on

things that are recorded at the

courthouse so really does it have to be

recorded and not necessarily it depends

on the third party that you're trying to

present the power of attorney to if you

bring a copy of the power of attorney

that your father signed and you bring

that to the bank and they say good

enough for us then there's no

requirement that it be recorded but if

you're trying to sell dad's home and the

and the title examiners

as son we're not gonna let you sign on

behalf of that and until that power of

attorney gets recorded then it's gonna

need to get recorded so there's you know

I've got to deal with those issues and

then maybe my tenth and final point is

the power of attorney stops when you die

so sometimes mom comes into the office

mom has a brokerage account at ABC

brokerage firm and mom says you know

this is gonna be easy for my daughter to

handle when I die because my daughter's

got power of attorney so when I die my

daughter can just go to ABC brokerage

firm and she can have access and pay

bills divide up the the investments

among the kids and that's gonna be easy

she can avoid probate well I'm gonna

happen because if daughter has power of

attorney that power stops when mom dies

and then that accounts going to be

frozen and ABC investment firm is going

to need to see all of the necessary

probate or succession court orders in

order to release the funds to the heirs

so power of attorney stops when you die

all right so the the conclusion among

all of that is or what do you take away

from it is do these things make these

decisions while you're well once you

become incapacitated you cannot create a

power of attorney and by the way if

you're incapacitated and there's

something that needs to be done on your

behalf and you haven't done a power of

attorney then your your loved ones are

gonna go through a treacherous court

proceeding which is no fun it's called

an interdiction it's where your family

will sue you to have you declared

incompetent very procedurally difficult

and a judge will have to declare you

incompetent after a bunch of procedural

stuff gets followed and time delays

lapse and then a judge will appoint

someone to be your guard

and that's all an absence of having a

power of attorney that works so do this

stuff while you're well do it right make

informed decisions and then the second

piece of advice that I have is appoint

people that you trust and that's that's

a tough one because yes you you may

trust this person and feel like they'll

do a good job for you but this person

that you appointed may not get along

with one of your other heirs or family

members and so you want to make sure

that you appoint people who not only are

gonna do what is in your best interest

but you want to make sure that they're

not gonna think do things in their best

interest particularly if they have

relationship issues with other people

who may inherit from you down the road

so appoint the right people people that

you trust and people that are

responsible and people that you know are

gonna take actions that are 100 percent

in your best interest so what I want you

to do in the comments below is as they

say I saw an AARP statistic that about

70 percent of people over 70 have a

power of attorney in place so in the

comments below

you know comment if you have one in

place and if so what was the basis on

how you selected the person that you

gave power of attorney to was it because

they were your oldest child or was it

because you trusted them a certain way

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so that's the kind of basics power of

attorney explained it's just one piece

of the overall comprehensive estate

planning program that you need to put in

place to to keep things in the family

and make it easy for those that you love

and leave behind

so I'm Paul Rabelais hope this helps

have a great day