Draw Up Powers of Attorney

A power of attorney (POA) is a document by which one person authorizes another to take actions on his/her behalf.

There are two types of Power of Attorney (POA):

  • A general power of attorney says that the agent can do anything and everything on behalf of the person who signed it (the principal).
  • A special power of attorney (sometimes called a limited power of attorney) sets limits on what the agent or attorney in fact may do, or specifies the particular action that is to be taken on behalf of the principal. For example, the principal might authorize the agent to sell a car.

Either a general POA or a special POA can be limited in other ways than defining the activities to which it applies. For example, it might be valid only until a certain date, valid only during assignment to a particular country, or valid only in the event of evacuation, physical disability, or hostage-taking.

Planning for "what do I do now" situations includes discussing possibilities within the family and recognizing that many Foreign Service families have faced emergencies -- in some cases with unfortunate or even tragic results. Although it is obviously impossible to prepare for every conceivable emergency or contingency, families should reflect on the following checklist of situations in which an employee and/or spouse/partner may be unavailable:

  • Withdrawing funds from both checking and savings accounts (check with your financial institution to see if they provide their own POA form);
  • Obtaining or extending loans (including educational loans) from banks or credit unions;
  • Borrowing money to buy a house (if joint ownership);
  • Opening charge accounts or lines of credit;
  • Renting, buying, or leasing real estate;
  • Invoking the diplomatic clause to reoccupy own home;
  • Buying, selling, or registering a car;
  • Borrowing for consumer items (clothing, furniture, appliances);
  • Selling or buying stocks, bonds, mutual funds, certificates of deposit (CDs);
  • Reinvesting when bonds, money markets, or CDs mature;
  • Signing for minor children (hospitals, schools, legal matters);
  • Managing the affairs of elderly parents; and
  • Filing federal, state, and local tax returns.

The advantages of having a POA are obvious: a trusted agent, family member, or attorney at law can take care of your affairs, even if you are unavailable to make the decisions or sign the documents.  Your POA designate does not need to be an attorney. 

However, every family should consider the disadvantages as well. The agent whom you trust today may not seem so trustworthy tomorrow; the only certain way to cancel or revoke a POA, unless it has an expiration date, is to tear it up.

Please note that persons and institutions are under no obligation to accept a Power of Attorney.  Banks and investment firms often prefer the use of their own in-house forms with a signature by the principal and the agent. To cope with some of these situations, joint accounts or joint ownership of investments may serve better than a POA, if the intention is to permit either spouse to have ready access to the funds (even if the account is small).

The ideal is for families to plan ahead, to anticipate the situations that may occur, and to consult attorneys, realtors, banks, or other institutions on the acceptability of POAs for the appropriate  uses.  Obtain advice and have contingency plans in place.

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