Powers of Attorney are documents that allow a person (the “agent”) to act on another person’s (the “principal’s”) behalf during the principal’s lifetime.  In Washington State, powers of attorney are governed by RCW 11.125.  The statute describes what powers may be granted under a power of attorney and allows for several powers to be granted in one document. 

Although there is a lot of flexibility when it comes to powers of attorney, it is most common for us to draft both a durable financial power of attorney and a durable healthcare power of attorney for someone with a will-based plan.  Importantly, financial powers of attorney may not be necessary for someone with a revocable living trust-based plan.  Click here to see a discussion on the differences between a revocable living trust-based plan and a will-based plan. 

Powers of attorney can be effective immediately, meaning the agent could act on the principal’s behalf on the date the document is signed, or powers of attorney can be effective on a future event – usually the principal’s disability.  Powers of attorney may also be durable meaning the document does not terminate on the principal’s incapacity. 

As mentioned above, allowing someone to be your agent means giving that person an ability to make decisions in your place, so it is extremely important that you trust whoever is your agent.  You should also tell your agent your wishes on various matters.  Do you want your agent to make a life-time gift on your behalf for estate tax planning purposes?  Should your agent step in and manage your business, or should your agent rely on someone else to manage your business?  

Not only should powers of attorney be coordinated with a person’s overall estate plan, it may also be important to coordinate the naming of the agent with that of the personal representative in a will-based plan or the successor trustee in a revocable living trust-based plan because powers of attorney are only effective during a principal’s life time.

A lot of these decisions are decisions you will need to make based on your circumstances, but it is helpful to talk through the various considerations with an attorney.