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

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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.

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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.

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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.

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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.

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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.

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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.

www.ParmanLaw.com

OVERLAND PARK, KS 10740 Nall Avenue, Suite 160 Overland Park, KS 66211 Phone: (913) 385-9400 Fax: (913) 385-9422

OKLAHOMA CITY, OK 13913-B Quail Pointe Drive Oklahoma City, OK 73134 Phone: (405) 843-6100 Fax: (405) 917-7018