POWER OF
ATTORNEY IN ARKANSAS Understand the Differences Between the Different Types of Power of Attorney So You Can Be Sure to Execute the Estate Planning Instrument that Best Fits Your Needs
DEBORAH SEXTON Power of Attorney in Arkansas ARKANSAS
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A Power of Attorney is an important estate planning tool. There are different types of power of attorney instruments. You can create either a General Power of Attorney or a Limited Power of Attorney. Each one has its own terms and limitations. You can also create a Durable Power of Attorney or Durable Power of Attorney for Healthcare. Each individual and each family
A power of attorney is obviously a very important estate planning tool.
has its own unique estate planning needs which must be considered. So, it is important to be aware of the differences between these instruments. With an understanding of the differences, you
can be sure to execute the estate planning instrument that best fits your needs.
WHAT IS A POWER OF ATTORNEY? A power of attorney is a legal document that gives an “agent” power or authority to act on behalf of the “principal.” In some states, an agent is also referred to as the “attorney-in-fact.” Most commonly, a power of attorney is created in order to handle financial or medical needs. For example, when a senior requires assistance in paying bills, managing bank accounts or any other aspect of their finances, they can execute a power of attorney. That way, the agent they choose can handle those financial matters on their behalf. A power of attorney is obviously a very important
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estate planning tool. The requirements for creating a power of attorney differ from state to state.
WHAT IS THE DIFFERENCE BETWEEN A SPECIAL AND A GENERAL POWER OF ATTORNEY? A General Power of Attorney is used to give an authorized agent the power to carry on business, such as finances or healthcare, for the principal. A general power of attorney provides broad power, typically relating to certain matters such as financial, business, medical, or legal decisions. A Limited (or Special) Power of Attorney is different from a General Power of Attorney in that it authorizes the agent to carry out only specific transactions on behalf of the principal. The key difference between these two instruments is the range of authority conveyed to the agents. Executing a general power of attorney is ideal in the event something happens that makes it difficult for you to take care of your own affairs. At that point, your agent can take over under the authority of the power of attorney. This would allow your business to continue without any concern that future problems may not be handled appropriately. On the other hand, a special or limited power of attorney only authorizes certain actions that can be made by the agent on behalf of the principal. For example, you can execute a power of attorney to allow your business partner to handle certain aspects of the business you might normally handle. Once the agent completes the duties set forth in a limited power of
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attorney, the powers are revoked and the legal document is no longer effective.
DURABLE POWER OF ATTORNEY A Durable Power of Attorney is a special type of instrument that either becomes effective when the principal becomes incompetent, or it remains in effect after that time. This is different than a non-durable power of attorney which would no longer be effective if the principal becomes incapacitated. In Arkansas, any power of attorney created on or after January 1, 2012 is automatically durable unless is specifically states otherwise.
DURABLE POWER OF ATTORNEY FOR HEALTHCARE A Durable Power of Attorney for Healthcare is also known as an Advance Health Care Directive. This legal instrument allows you to choose an agent to make healthcare decisions on your behalf. This includes deciding whether to consent to medical treatment and whether to refuse medical treatment, even in the case where death may
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result. A Durable Power of Attorney can be combined with a Living Will, which is a legal document that spells out a person’s wishes in the event they become unable to make medical decisions on their own.
BENEFITS OF POWER OF ATTORNEY Appointing someone to act on your behalf has many advantages. You can clearly define, ahead of time, how you require your financial affairs to be handled in the event you become incapacitated. You will have peace of mind knowing that the person you choose is the one who will ultimately act on your behalf, instead of that person being chosen by the court. Another benefit is that your agent will be in a position to ensure you get the benefits you are entitled to because he or she can make your claims and submit applications for you. Your agent cannot take any actions or conduct any transactions that are not authorized by the Power of Attorney, this includes transferring property, after your death. Therefore, in order to ensure that your assets are distributed as you wish, when you die, you need to execute a Trust, Will or some other estate planning tool.
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When you give a Power of Attorney to someone, you do not give up your rights to manage your affairs in general. You retain complete control over everything, even after a Durable Power of Attorney has been signed. The agent will act, or not act, at your discretion. You can always revoke the Power of Attorney at any time, for any reason.
WHEN DOES A POWER OF ATTORNEY END? A Power of Attorney will end if a specific date for termination is indicated in the document itself. A Power of Attorney will also terminate if either the agent or the principal dies, or if the agent resigns and there is no other agent specified to take his or her place. In Arkansas, if the agent is the spouse of the principal, and the couple gets divorced or separated, the power of attorney is no longer effective. Finally, the principal can always revoke the power of attorney in writing and file it with the court. If you have a Durable Power of Attorney, and you become incompetent, it can only be revoked by the court. The court can also revoke the power of attorney if a petition is filed on your behalf alleging that the agent has violated his or her duties. Although there are many do-it-yourself power of attorney forms available, it would be better to ask an attorney to draft this legal document specifically for you. One size does not fit all when it comes to most estate planning instruments. Contact an Arkansas estate planning law attorney for assistance.
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About the Author Deborah K. Sexton As the sole attorney in the Fayetteville law firm of Deborah Sexton Law Office, Deb oversees a practice devoted to providing clients with the best in estate planning. Deborah Sexton, C.P.A., J.D., L.L.M., combines an extensive background in accounting with a wide range of legal experience to provide her clients with a uniquely practical perspective. An attorney since 1983, she now devotes her practice primarily to estate planning and elder law. EXPERIENCE After obtaining her undergraduate degree in accounting from Abilene Christian University in Abilene, Texas, she worked in Dallas in public accounting for several years, and then went to the University of Arkansas Law School in Fayetteville. Upon graduating from law school, she went on to obtain an L.L.M. degree in Taxation from New York University. Deborah Sexton Law Office www.arkansas-estateplanning.com 2766 Millennium Drive Fayetteville, AR 72703 Phone: (479) 443-0062 Fax: (479) 443-2001
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