Experienced Power of Attorney Lawyers in Bergen County, NJ Provide Legal Support for Clients’ Power of Attorney Matters in Passaic County, Essex County, and Throughout New York, including Queens County, Nassau County, and NYC
Many have heard of a power of attorney but do not fully understand its meaning and why it is necessary for an estate plan. A power of attorney is a legal document that authorizes another person (individual or company) to be an agent (also known as an attorney-in-fact). An agent can do some of the most important things on behalf of the principal (the person who creates a power of attorney). The experienced New Jersey power of attorney lawyers at the Choi Law Firm can provide you with this overview of powers of attorney so you know which one makes sense for you or your loved one.
When Does a Power Of Attorney Go Into Effect?
When you create a power of attorney, you select someone known as the agent (i.e., spouse, sibling, bank) to handle some of the most important decisions on your behalf when you are disabled or incapacitated, or otherwise unable to handle those decisions. Under New Jersey law, a court considers you disabled if you cannot manage your property and affairs effectively. Whether you appoint someone as an agent now or at your incapacity, a power of attorney cannot be used to override your wishes if you can still effectively and reasonably manage your affairs.
Main Types of Documents our New Jersey Power of Attorney Lawyers Can Help You With
There are two documents that an experienced estate planning attorney will recommend – medical power of attorney and property power of attorney.
Medical Power Of Attorney
A medical power of attorney is a legal document that appoints an agent to make medical decisions on your behalf if you are unable. If you do not have a medical power of attorney, your spouse will be the person who makes decisions on your behalf. If you are unmarried, it is your next of kin (i.e., parents, siblings, or children).
However, suppose you have a medical power of attorney, and you name your mother as your agent for medical situations. In that case, your husband or wife can no longer make the decision. Only your mother can. This is common as people get older and begin dealing with dementia and Alzheimer’s. Your medical power of attorney will have the ability to make decisions on your behalf even when you are awake and disagreeing – but only if you have been found mentally unsound. For example:
- Health care representative is authorized to withhold or withdraw artificially provided fluids and nutrition such as by feeding tube or intravenous infusion.
- Health care representative is not authorized to withhold or withdraw artificially provided fluids and nutrition such as by feeding tube or intravenous infusion.
A medical power of attorney is only valid if the document is signed and witnessed by someone at least 18 years of age.
Property Power Of Attorney
You can give a property power of attorney as much authority or as little authority as you desire. However, its purpose is to make sure that once you can no longer make financial decisions for yourself, your property power of attorney will be able to pay your bills and keep your investments in line. Like a medical power of attorney, the property power of attorney generally goes into effect when you can no longer efficiently and reasonably manage your affairs. Here are some of the powers that you can provide to an agent:
- Real property transactions
- Tangible personal property transactions
- Stock and bond transactions
- Commodity and option transactions
- Banking and other financial institution transactions
- Business operating transactions
- Insurance and annuity transactions
- Estate, trust, and other beneficiary transactions
- Claims and litigation
- Personal and family maintenance
- Benefits from Social Security, Medicare, Medicaid, or other government programs, or military services
- Retirement plan transactions
- Tax matters
According to New Jersey law, principals may direct whether their agent is to be compensated within the power of attorney document or in a separate written arrangement. The principal may provide methods to calculate and pay compensation. If there are no directions regarding the procedure, the court may award reasonable compensation.
Therefore, it is vital to track how many hours and money you spend performing your duties as an agent. For example, keep track of mileage if you go to the bank and run errands on behalf of the principal to ensure that the principal pays you properly.
Naming An Agent
For most power of attorney documents, there is only one agent designated at a time. This is to avoid disagreements that would require court intervention. One of the reasons to have an agent is to avoid needing the court to approve actions on your behalf or name someone to take care of you if you are incapable of managing your affairs. You can name successor agents to ensure that if your agent pre-deceases you, are incapable, or refuses to act as your agent, there is someone else who can fill that role.
Authority Of An Agent
According to New Jersey law, if you authorize your agent to conduct banking transactions, here are some of the things they could have the power to do:
- To continue, modify or terminate any account or other banking arrangements;
- To open an account of any type in any banking institution;
- To draw, sign, and deliver checks or drafts for any purposes, to withdraw, order, draft, or wire transfer any funds or property of the principal left in the custody of a banking institution;
- To prepare periodic financial statements concerning the assets and liabilities or income and expenses of the principal;
- To receive statements, vouchers, notices, or other documents from any banking institution and to act concerning them;
- To have free access during regular business hours to any safe deposit box or vault of the principal;
- To borrow money by bank overdraft, loan agreement, or promissory note of the principal given for a period or on-demand and at an interest rate the agent selects;
- To make, assign, endorse, discount, guarantee, and negotiate for any purpose all promissory notes, checks, drafts, or other negotiable or non-negotiable paper instruments of the principal or payable to the principal;
- To apply for and receive letters of credit or traveler’s checks from any banking institution selected by the agent.
Fiduciary Duties Of An Agent
An agent named in a power of attorney is a fiduciary, meaning the agent is required to act in the principal’s best interest. Moreover, as a property power of attorney, the agent must do accounting. The duty to account includes maintaining accurate books and records of all financial transactions. Suppose the attorney fails to maintain accurate books and records of all financial transactions. In that case, the court may find that the agent has breached their duty, resulting in liability to the estate of the principal.
Additionally, the agent may only act in the interest of the principal. If the agent acts in their self-interest, the agent potentially breaches their fiduciary duties and may be held liable. A breach of this manner, for example, means that if you own a publicly-traded company and are in charge of someone’s investments, you are not allowed to put all of the principal’s investment assets into your company.
Contact Our Skilled New Jersey Power of Attorney Lawyers Today
An experienced attorney will be able to draft power of attorney documents to meet your unique needs. Are you at a point in your life where you believe it is time to set out an estate plan properly and to learn more about how to protect your interests while you’re still living and at your death? Contact the experienced estate planning attorneys at Choi Law Firm by calling 201-613-5557 or contacting us online for a confidential consultation.
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