What Is a Power of Attorney and
What Kind Should I Have?
Sullivan & Griffith • Serving Families and Individuals in Guilford, New Haven and Madison, CT
A Power of Attorney allows a person or persons that you designate to act on your behalf as your agent. Your agent is called your "Attorney in Fact." The power you give to your Attorney in Fact can be extremely broad, allowing him or her to act in any situation in which you could act for yourself, essentially as your "alter ego." A Power of Attorney can also be more limited in scope. It can grant a specific power for a specific reason or time period.
Durable or Springing?
When considering whether to appoint an Attorney in Fact, you should consider whether you want your Attorney in Fact to be able to act on your behalf at any time; or whether you only want to appoint someone to act for you if you cannot act for yourself. A Durable Power of Attorney is effective as soon as you sign it, and remains effective even if you subsequently become incapacitated. The person you name as your Attorney in Fact can sign your name without consulting you, and that signature has the same legal effect as if you had signed the document for yourself. A Durable Power of Attorney also remains effective until you revoke it. Durable Powers of Attorney are often signed for convenience purposes. For example, it can allow spouses to conduct joint financial affairs when only one spouse is available to sign the pertinent documents, or attend a closing, etc. A Durable Power of Attorney should never be given to anyone that you do not trust completely with all of your personal and financial affairs.
A Springing Power of Attorney offers the same broad range of power provided by a Durable Power of Attorney, but only takes effect after one or more physicians pronounces you to be incapable of conducting your own affairs. Thus, the person named as your Attorney in Fact under a Springing Power of Attorney cannot act on your behalf in any capacity unless and until your doctor(s) pronounce(s) you incompetent.
This limitation can delay the use of a Springing Power of Attorney, because it requires one or more physicians to actually sign a legal certification of incapacity. Another potential downside of a Springing Power of Attorney is the resulting intrusion on the privacy of your medical affairs. To be effective, the Springing Power of Attorney must attach the legal certification of your incapacity. This certification will be circulated anywhere that the Power of Attorney is used.
Short Form or Long Form?
If you have ever seen a Power of Attorney, either for yourself or for someone else, it can take several different forms. Many states, including Connecticut, have defined the scope of a Power of Attorney by statute, and have created a specific legal form for the document. This is commonly referred to as a "Statutory Short Form" Power of Attorney. The advantage of using the Statutory Short Form is that the words and the format of the document are always the same. They are set forth in the statute. Many financial institutions are used to seeing this type of Power of Attorney and their employees know exactly what to look for in terms of ascertaining its validity. The disadvantage of the Statutory Short Form is that the language is very general, and may not address your particular needs or circumstances. The powers granted are described in broad terms, and if a particular power is not specifically listed, the Power of Attorney can be rejected. (For example, a bank teller might question whether the Statutory Short Form's authority to conduct "banking transactions" includes the power to access a safety deposit box. The Connecticut General Statutes are clear that it does – but convincing the local bank teller that the form is correct may involve several telephone calls to your attorney and/or the bank's internal legal department.)
But a Power of Attorney does not have to be executed in the Statutory Short Form. The document can be manuscripted to cover many different special situations. This is often described as a "Long Form" Power of Attorney. It generally contains several more pages than the Statutory Short Form, but it can address situations that the Statutory Short Form does not. For example, the Long Form can address the needs of a closely held business, or the sale of a specific piece of property, or dealing with a revocable trust or the power to make gifts. These types of powers must be specifically granted. They are not covered by the Statutory Short Form. However, there are some drawbacks to the Long Form as well. Because a Long Form Power of Attorney is specifically drafted, it is not as common as the Statutory Short Form. A clerk or teller or other recipient may not have seen a Power of Attorney that looks exactly like yours, and may have questions about the format and whether the words used cover the specific situation.
In many cases, we recommend that clients execute two Powers of Attorney: one in the Statutory Short Form and the other a more specifically crafted Long Form. Many financial institutions are used to seeing the Statutory Short Form Power of Attorney, and their employees know exactly what to look for to ascertain its validity. The Long Form Power of Attorney is more specific, and can address situations that the Statutory Short Form does not. Because every situation is different, having both types of Powers of Attorney can help ensure that your Attorney in Fact is armed with the appropriate document for the situation.