In North Carolina, a power of attorney is a document which allows someone you trust to act as your legal agent. North Carolina recognizes both a health care power of attorney and a financial power of attorney. A health care power of attorney authorizes your agent to make health care decisions on your behalf. A financial power of attorney authorizes your agent to make financial decisions on your behalf. He or she will have the power to conduct your affairs, such as buying or selling a house, paying off debt or creating new financial obligations.
A financial power of attorney can be classified as either “general” or “special” (also called “limited”). A general power of attorney gives the agent broad powers over the grantor’s legal and financial affairs. A limited power of attorney allows you to delegate specific and narrow circumstances in which the legal agent has authority to act on your behalf. For instance, you can create a power of attorney specifically to allow someone else to buy or sell a house for you. While a power of attorney can have broad powers, there are certain things which cannot be done through a power of attorney. For instance, an agent cannot participate in a marriage ceremony on your behalf or execute a will on your behalf.
A power of attorney can be further classified as either “durable” or “nondurable.” The difference between the two has to do with the time the document expires. A durable power of attorney continues in effect even if the person who created it becomes mentally incapacitated. A nondurable power of attorney automatically expires if the person becomes incapacitated.
The power of attorney is extremely useful. Let’s say you need to travel outside of the country for several months but need someone back home to handle your affairs? A validly executed power of attorney would ensure your agent could conduct your business matters for you. Similarly, if you become mentally incapacitated, a durable power of attorney makes it easier for your family to take care of your finances. Without one in place, a friend or family member would have to go through costly legal proceedings to obtain legal guardianship over you.
With so much power, this document does have the potential to be abused. That is why it is important to choose someone you trust implicitly as your agent.
If you believe you may need a power of attorney, contact us to speak with one of our knowledgeable attorneys today.