What Is A Power Of Attorney?
A power of attorney gives your agent the right to make financial decisions on your behalf and handle your financial matters. Many states provide statutory forms that give your agent broad powers to handle many different financial matters. However, you can have your power of attorney document customized to address your particular wishes. Power of attorney designations are often provided to allow the agent to handle tasks like:
- Selling real or personal property
- Handling checking, savings, or other financial accounts
- Securing, canceling, and renewing various types of insurance policies
- Cashing checks
- Collecting benefits
- Making gifts of money
- Paying bills
- Making investments
- Filing tax returns
- Handling legal claims
A factor that can affect how a power of attorney is involved in the divorce process is the effective date of the power of attorney. The designation may become effective immediately, only when the person signing it (the “principal”) becomes incapacitated, or at some point in the future when it “springs” into effect, depending on how the power of attorney is worded.
Types of Power of Attorney Designations: Special vs. Durable
There are several different types of power of attorney designations that may assign different permissions. These include the following:
General Power of Attorney
A general power of attorney acts on the principal’s behalf in all matters allowed by state law. This type of power of attorney generally has the most amount of power and permissions, including handling legal claims on the principal’s behalf. If an agent is named as a general power of attorney, it is possible that he or she may be able to handle many tasks associated with the divorce. But can a power of attorney file for divorce? Probably not unless the court finds that the principal lacks the capacity to handle this matter alone. The court may have to grant special permission to allow a divorce petition by a power of attorney.
Special Power of Attorney
A “special” or “limited” power of attorney has powers that are limited to only a specific situation or area, such as helping to sell a house.
Durable Power of Attorney
An agent of “durable” power of attorney retains the powers provided to him or her even if the principal becomes incapacitated.
Springing Power of Attorney
A springing power of attorney becomes effective upon the occurrence of some event or a future date, based on the wording of the power of attorney document.
Can a Power of Attorney Sign Divorce Papers?
Some people may wonder “Can power of attorney sign divorce papers?” Generally, your agent cannot sign divorce papers on your behalf. However, this may be allowed in your particular state or in your particular court. The answer may also depend on if your power of attorney is for a mutual consent divorce in which you and your spouse agree to all the material terms of your divorce.
What Can A Power Of Attorney Be Used For?
While a divorce through a power of attorney may not result in your agent being able to sign your divorce papers, your agent may still be able to perform a number of duties that can help you, including:
- Creating an inventory of marital and separate property
- Having your property appraised
- Safeguarding your property
- Helping you answer questions in discovery regarding your property, income, and financial interests
- Handling bank and financial accounts for you
- Contacting investment administrators on your behalf
- Maintaining insurance on your property
- Signing contracts
- Completing tax returns
- Requesting tax documents
- Collecting debts
- Applying for public benefits
Generally, an agent in a power of attorney cannot perform certain tasks unless the power of attorney document specifically states otherwise. These tasks usually include:
- Creating, revoking, or modifying a will or codicil to a will
- Creating, revoking, or modifying a trust agreement
- Ordering an abortion
- Performing personal service contracts
- Contracting to a marriage
- Delegating power of attorney to someone else
- Breaking fiduciary duty to act in their own self-interest
Does Divorce Revoke A Power Of Attorney
While divorce generally revokes any gift you leave to an ex-spouse in a will, divorce may or may not revoke a power of attorney, depending on state law. The following states do automatically revoke a power of attorney upon divorce:
Additionally, banks, creditors, and other third parties who are acting under the permissions given in a power of attorney cannot be held liable for acting under this legal authority unless they have specific knowledge that the power of attorney has been revoked. This may mean that you will need to take further action to officially revoke the power of attorney designation.
How to Revoke A Power Of Attorney
The procedure to revoke a power of attorney is based on state law. Generally, a power of attorney can be revoked in one of the following ways:
- In writing – You may be able to create a document that specifically states that you are revoking the power of attorney you executed on a previous date.
- By destruction – You may be able to burn, tear, or otherwise “obliterate” the original power of attorney document.
- By creation of a new power of attorney – You can create a new power of attorney document that states that you are revoking any previous power of attorney documents you executed before the current date.
Regardless of which method you choose, you will need to provide notice to your former agent of your revocation to make the revocation official. You should also give notice to any third party that was acting under the power of attorney. If you recorded the power of attorney with the court, you should also record the revocation with the court.
You may want to revoke your power of attorney in favor of your spouse once the divorce proceedings are underway so that they will not be able to act under it. Once you begin the divorce process, you and your spouse are technically adversaries, and you will not want them to have an upper hand by using a legal designation you provided to them when you were working together as a team.