If a power of attorney is updated from time to time, then it is one of the most powerful documents for the principal for his future planning. Regularly updating your power of attorney is undoubtedly one of the most crucial components of an effective future plan for managing a principal’s personal, legal, financial, and health-related matters.
A durable power of attorney is a really effective instrument and powerful tool for the principal. A Power of Attorney grants authority to an agent to handle and carry out important decisions for the Principal related to legal and financial matters. Because of this, it is crucial that your agent is reliable. So it is frequently advised that the principal should not grant his POA to somebody whom he wouldn’t trust.
The principal creates a durable Power of Attorney as part of his thorough future planning. A durable power of attorney that was drafted by the principal years ago could no longer be what he desires in the present situation, as circumstances may change over time. Furthermore, powers given in the POA can be misused by the agent, and the effects or results of that can be disastrous. Powers of attorney are actually one of the main ways that the elderly, infirm, and incapacitated are defrauded and financially exploited.
Considering this situation, several states have changed their rules and regulations regarding giving authority to POA agents, by placing specific requirements on the powers that the principal of durable powers of attorney bestow on their agents and on the fiduciary obligations of those agents. Many financial institutions have implemented policies and procedures regarding the acceptance and recognition of credentials to offer additional security against the exploitation of these powers granted by the principal to his POA agent.
Individuals frequently discover that powers of attorney they signed years ago are not operating as expected when they need them the most because of changes in personal situations as well as changes in regulations and legal practices.
When circumstances in an individual’s life change or an individual wants to change his POA agent and appoint a new one, in these cases an individual should update his power of attorney. Here are various scenarios where an Updating your power of attorney would be necessary.
The reasons an individual might wish to update his power of attorney can be varied, but there are typically three circumstances when an individual needs to update his power of attorney. The first is when the principal’s life circumstances change; the second is when the principal encounters a challenge with the POA agent chosen by him; and the last is when the principal wants to address what he wants to cover in his power of attorney.
Change in Life Circumstances
An individual can’t predict what his life has in store for him while executing power of attorney for managing his personal and financial affairs in the future. For example, the Principal can start a new business or change his business, or start giving large sums of money to a charity, etc. Any circumstances like these can make the principal Updating your power of attorney.
Following are some of the typical scenarios where an individual should consider updating his power of attorney:
- When the principal gets married and wants to designate his/her spouse as a POA agent.
- When the principal appointed his spouse as his/her POA agent, and he/she is divorced now and wishes to replace the ex-POA agent by naming or appointing new power of attorney.
- When the principal’s adult child is now capable of handling his affairs and willingly wants to handle affairs and responsibilities.
- When there are changes in laws that impact the legal effect and validity of existing power of attorney.
The Principal Encounters A Challenge with the POA Agent Chosen by Him
Both having new family members to handle responsibilities and having issues and difficulties with the POA agent could force the principal to re-evaluate his power of attorney. The following instances could result in the appointment of a new agent:
- When the POA agent appointed by the principal has passed away,
- When the POA agent appointed by the principal is no longer capable to handle the powers and responsibilities given by the principal
- When the POA agent is in jail or is the subject of an investigation;
- When the Principal and POA agent is unable to maintain a harmonious relationship.
- When the principal is not anymore sure about the POA agent’s capacity to manage his affairs relating to crucial matters like finance or health.
Changes in Power Of Attorney by the Principal’s Own Will
The principal may choose to restrict or broaden his power of attorney and powers granted to the POA agent, but he continues to trust his POA agent, even when his life circumstances remain the same. In other words, the principal might prefer to put more restrictions or limitations on or grant more powers to his POA agent. There are several reasons for this. It may happen that the principal thinks about managing his affairs by himself and wants to make decisions for himself regarding his business, health, and personal matters.
An individual’s power of attorney must be Updating your power of attorney from time to time, at least once every ten years, because:
Laws change with time; banks and other financial institutions may reject an older document; names might change; it can be either the principal’s or agent’s name in the case of marriage; and legal trends can alter, making it necessary for you to have greater authority to protect your assets.
Procedure to Update Power Of Attorney
If an individual needs to make modifications or wants to Updating your power of attorney his existing POA document the individual must first withdraw his/her current power of attorney document. An individual can do this procedure with the revocation of power of attorney. Then draft a new power of attorney document containing the modifications an individual desires.
Updating your power of attorney from time to time makes it a powerful and useful document for the Principal for his future planning. The reasons an individual might wish to update his power of attorney can be varied. When the principal’s life circumstances change, the relationship between the principal and the POA agent is no longer harmonious. When the principal wants to manage his affairs by himself, when the law changes, when the principal wants to restrict or broaden the POA agent’s powers, etc. Typically under the above mentioned circumstances, an individual feels the need to Updating your power of attorney.
Read Our Article: What Is A Power Of Attorney And Why Is It Important?