Is your financial power of attorney immediate or incapacity only?

Meaning, can your Agent act on behalf of you in financial transactions as soon as you signed your power of attorney, or, will your Agent ONLY be able to act if something triggers their authority to kick in, in Georgia that is usually your incapacity as decided by a medical doctor (or two).

When we work with our clients, BEFORE THEY EVEN SEE THEIR FINAL DOCUMENTS FOR APPROVAL, we educate them on the difference between a power of attorney that works immediately for them or one that works on “incapacity only.”  Before we educate you, we want to remind you of what a power of attorney for finances will allow you to do and someone to do for you.

Always remember, a power of attorney (in Georgia we refer to it as a Statutory Durable Power of Attorney for Finances) will do a few things:

  1. Allow you to name someone to help you in financial transactions and matters.
  2. This person will be able to ACT AS YOU in whatever financial transaction you choose.
  3. You will get to decide, transaction type by transaction type, whether you want someone to have authority to do that particular transaction.  Or you can choose “all preceding.”
  4. You will get to decide whether your Agent will be able to act immediately after you sign the document OR only if you are incapacitated.

Let me now explain what that #4 is all about: immediate vs. incapacity only.

“Effective Immediate” = When you sign it, your Agent has all the power in the document you have granted to them and can act on your behalf without your specific, in the moment, permission or knowledge.  So all the financial transactions you initial, they can do for you IMMEDIATELY after you sign.

“Incapacity Only” = Your Agent shall not act unless you are incapacitated.  They may be nominated, but they have no authority (yet). Incapacitated typically is determined by a medical professional, some individuals want 2 medical professional opinions.  Your Agent will not be able to help you until this medical opinion (or two) are in writing.

When you sign your documents, you really should understand which of these you have chosen.  There is a pro vs. con for both options.  What is a pro and what is a con is only for you to decide, though!  So understanding the difference is really a must in order for you to make a pro vs. con decision.

Here are a few pros and cons (again, you decide which is which):

  • If immediate, they will be able to act without your knowledge or permission.
  • If immediate, they will be able to help right away and have no obstacles to getting done what needs to be done (such as bill paying, medical decisions, supporting dependents, etc.)
  • If immediate, they will not need to find a medical doctor willing to provide an incapacity statement.
  • If immediate, no concerns over whether you are or are not incapacitated as determined by a medical doctor.
  • If not immediate, they will not be able to access anything financial or health care related without you being incapacitated.
  • If not immediate, you will be able to do it all yourself.
  • If not immediate, a medical professional is involved with determining if you can or cannot do it yourself.

Do you have a financial power of attorney already signed?  If so, take your document out and see if you can determine if it is effective immediately or only if you are incapacitated.  HINT: If you see nothing in your document making a clear statement on when it is effective, chances are it is IMMEDIATE.  That is the default.  Another HINT: If it is incapacity only, there is a chance it will speak to “effectiveness” in the Special Instructions.

If you do not have a durable power of attorney for finances, we’d love to help you put one in place!  We help people in Atlanta and surrounding areas put Durable Power of Attorneys in place all the time!  We want to help you.