This is our second post in this series on using a Power of Attorney in Oklahoma. Our last article explained that a power of attorney gives specifically defined legal authority to another person. The principal – the person who signs the power of attorney – can give as much power, or as little power, as they want to their agent.
But how long does this power last? And does it survive death or incapacity? Those are the questions we will address in this post.
When does a power of attorney expire in Oklahoma?
Under Oklahoma law, a power of attorney is only valid during the life of the principal. That is because a power of attorney document is similar to a business contract. But it is not testamentary in nature. A testamentary document is a legal document that takes effect after you die. A will is an example of a testamentary document. A trust can be both living and testamentary, as trusts are very versatile documents (which is why we recommend trusts to our clients).
A power of attorney, on the other hand, is useful when you are alive. You can direct any person of your choosing to handle as much or as little of your personal financial affairs as you so choose. Perhaps one of the most useful aspects of a power of attorney is the ability to give power to a person during a situation when you are unable to handle your own business and financial affairs.
What is a durable power of attorney?
A durable power of attorney allows to the agent to keep using his or her powers even if the principal becomes incapacitated. We say that the document is “durable” because it withstands the incapacity of the principal. In other words, if the person who authorized the power is no longer capable of revoking it, the power remains in effect.
A durable power of attorney is useful when you anticipate that you may soon become ill and unable to manage your finances. By putting a durable power of attorney in place, your agent will be able to continue to manage your assets even if you are in the hospital and unconscious. However, if you were to die, the power of attorney would cease to be effective and your estate would have to be administered through a court.
What happens if the power of attorney is non-durable?
In the event you become incapacitated, your agent will lose the power to act unless the power of attorney explicitly stated that it would be unaffected by incapacity of the principal. There are reasons for having a durable POA and a non-durable POA. There are situations where you will want the power to survive your incapacity and many other situations where you would want it revoked.
It is worth reminding you right now that a power of attorney is merely one document, one tool that we use in estate plan. A single POA is not an estate plan in itself and cannot make up for a lack of total estate planning. A trust is also merely one tool in a comprehensive estate plan. But a trust can authorize the same powers as a power of attorney, as well as accomplish many more things. A trust can also provide much more thorough definitions of incapacity. These are all things to consider when creating powers of attorney with your family members and trusted advisors.
Speak to an Oklahoma City Lawyer that handles Power of Attorney cases
If you have a situation involving a power of attorney in Oklahoma City, contact our office to schedule a consultation. We can provide comprehensive estate planning as well as create documents when you need them.
Our next article addresses the specific legal requirements of a power of attorney in Oklahoma.