POWERS OF ATTORNEY IN OKLAHOMA

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1 QUESTIONS ABOUT POWERS OF ATTORNEY IN OKLAHOMA In today's discussion on powers of attorney, we will take a look at additional details surrounding these all-important estate planning documents. By Larry Parman OKLAHOMA ESTATE PLANNING ATTORNEY

2 In today's discussion on powers of attorney, we look at important details surrounding these all-important estate planning documents. Powers of attorney are unlike many other kinds of estate planning documents because they are flexible in what they allow you to do. When you create a power of attorney, the provisions you include within it are almost entirely up to you. When you decide to pass on decision-making authority to others, you get to control almost every aspect of the relationship. So, here is what you should know about customizing powers of attorney to fit your needs. Questions About Powers of Attorney Part 2 2

3 TERMINATING AN AGENT'S AUTHORITY One of the key issues underlying every principal agent relationship created by a power of attorney is the issue of termination. As a mentally competent principal, you retain the legal authority to fire your agent (otherwise known as your attorney-in-fact) whenever you like. All you have to do to terminate the agent's power is tell the agent that he or she no longer has the authority to represent you. If a copy has been provided to anyone else, these parties need to be notified, as well. It's also important to point out that terminating an agent's authority is something that can happen automatically. Your agent s authority ends either by including specific language that terminates an agent's authority if certain conditions arise or when your agent learns you have died. Further, if you create a non-durable power of attorney and become incapacitated, your agents lose their authority to take actions on your behalf as soon as they become aware of your incapacitation. Questions About Powers of Attorney Part 2 3

4 ALLOWING YOUR AGENT HOT POWERS There are specific limitations with regard to powers of attorney depending on the state in which you live. Many states have laws that prevent agents under your power of attorney from making certain decisions unless the principal (you) specifically allows them to do so by granting authority in writing in the power of attorney. These limitations are often referred to as hot powers of attorney. For example, if you want to give your agent the ability to give gifts, you should explicitly grant this authority in the power of attorney. Though you don't need to be aware of all the types of decisions that must be expressly granted through a power of attorney, you need to be ready to discuss with your attorney the kinds of decision-making authority you want to delegate. Your attorney will then explain whether or not you need to specifically grant these powers. Questions About Powers of Attorney Part 2 4

5 POWER OF ATTORNEY LIMITATIONS Even though powers of attorney are very flexible documents, you still have to take great caution when creating and using them. This is especially true when you rely on your agent to act on your behalf when dealing with third parties. Depending on the third party involved, you might need to periodically review and update any power of attorney you create. For example, if you create a financial power of attorney that gives your agent the right to use your bank account, your bank will want to be assured the agent is legally allowed to act on your behalf. If the power of attorney is more than five years old, for example, the bank might be hesitant to, or refuse to, recognize it. So, even if your power of attorney meets all necessary legal requirements, you might still need to take additional steps to ensure your agent can represent you without difficulty. Questions About Powers of Attorney Part 2 5

6 TALK TO A LAWYER ABOUT POWER OF ATTORNEY Regardless of your individual circumstances, estate planning goals, or concerns, a power of attorney is a flexible, powerful legal document you can use to your advantage. Having the right power of attorney in place at the right moment can be incredibly important. Not only can it save you a lot of time and money, but it can also prevent needless stress and uncertainty. In the right situation, a good power of attorney both protects your interests and communicates your desires to the people that matter most to you. As with any legal document, it's vital that you speak to an experienced lawyer when considering creating, using, or modifying a power of attorney. Your attorney will explain your options and advise you on what is best in your situation. Only after speaking to an attorney and creating a power of attorney that meets your needs can you be assured you have done all you can to protect yourself. Questions About Powers of Attorney Part 2 6

7 About the Author Larry Parman After helping his own family deal with a lengthy probate and a battle with the IRS following his father s death in a farm accident, Larry made a decision to help families create effective estate plans designed to reduce taxes, and minimize legal interference with the transfer of assets to one s heirs, and protect his clients assets from predators and creditors. Following a dozen years in the investment banking and financial services business, in the mid- 1980s Mr. Parman formed a law firm that gives families the peace of mind that comes from having created a premier estate and financial plan. After forming his law firm in 1984, he offered a series of public and private seminars to inform the public about using a Living Trust as the foundation of a family s estate plan. Today, Parman & Easterday is one of the leading business and estate planning law firms in the Midwest. The firm s primary focus is on business and estate planning, elder law, asset protection, and providing effective estate planning solutions for clients. Today, the firm s premier estate plan design is referred to as a Legacy Wealth Plan. Mr. Parman is a frequent guest on the radio and can be seen on television talk shows explaining the importance of proper estate planning. Prosperity Productions selected Mr. Parman as a featured speaker in a nationally-recognized educational video on Living Trusts. He is the author of numerous published articles on financial and estate planning matters and the co-author of two books, Estate Planning Basics: A Crash Course in Safeguarding Your Legacy and Guiding Those Left Behind in Oklahoma: Settling the Affairs of Your Loved Ones. Mr. Parman is a member and Fellow of the American Academy of Estate Planning Attorneys. He is also a member of the Oklahoma and Missouri Bar Associations, the American Bar Association, and the Oklahoma City Estate Planning Council. OVERLAND PARK, KS Nall Avenue, Suite 160 Overland Park, KS Phone: (913) Fax: (913) OKLAHOMA CITY, OK B Quail Pointe Drive Oklahoma City, OK Phone: (405) Fax: (405) Questions About Powers of Attorney Part 2 7