In the state of Georgia, a financial power of attorney is a legal document that grants a trusted individual the authority to manage your financial affairs when you are unable to do so yourself. A financial power of attorney carries significant weight, often serving as a safety net during times of incapacity or absence. But what does establishing one entail? How does it function within the specific jurisdiction of Georgia? And most important, what are the steps for creating a financial power of attorney in the Peach State? Here’s what you need to know.
A financial advisor could help you create a comprehensive estate plan that includes a financial power of attorney.
What Is Financial Power of Attorney?
A financial power of attorney is a document that grants a trusted individual, known as the agent, the authority to manage the financial affairs of another person, the principal. This power can encompass handling bank transactions, signing checks, paying bills and making strategic investment decisions.
If you are someone who travels extensively, is stationed overseas for military service, or faces health issues that might impair your decision-making abilities, a financial power of attorney can ensure that even in your absence or incapacity your financial affairs could be handled prudently.
Is Financial Power of Attorney Durable in Georgia?
Before diving into the specifics of Georgia law, it’s essential to understand what “durable” means in the context of a power of attorney. A “durable” power of attorney stays in place even if the principal becomes incapacitated, unlike a “non-durable” power of attorney, which is terminated in the event of the principal’s incapacity.
Consider this example: If a principal with a non-durable power of attorney falls into a coma, the agent would lose their power to manage the principal’s finances. However, with durable power of attorney, the agent can continue to handle their financial affairs.
In Georgia, a financial power of attorney is considered durable unless the document explicitly states otherwise. This implies that the agent can continue to manage the principal’s financial affairs regardless of the principal’s mental or physical condition. Therefore, Georgia residents seeking to create a power of attorney should be aware of this provision and ensure their document aligns with their intentions.
Additionally, Georgia typically recognizes power of attorney created in another state provided that it complied with the laws in that state at the time that it was established.
Does a Financial Power of Attorney Cover Medical Decisions?
You might think that a financial power of attorney covers all decisions, including medical ones. However, this is a common misconception. In Georgia, a financial power of attorney strictly pertains to financial matters and does not extend to medical or health-related decisions.
As an example, an agent with a financial power of attorney could manage the principal’s bank transactions but would not have the authority to decide on their medical treatments.
For medical decisions, a separate document called a medical power of attorney is necessary. This legal contract allows a chosen individual to make healthcare decisions on behalf of the principal when they are unable to do so. This includes decisions about medical treatments, healthcare providers, and end-of-life care.
Creating a Financial Power of Attorney in Georgia
Creating a financial power of attorney in Georgia involves several straightforward but important steps. To simplify the process, we will break it down into the following:
- Appoint an agent
- Fill out the POA form
- Sign and notarize the form
Appoint an Agent
Selecting an agent is the first step in creating a financial power of attorney. This should be someone you trust and someone who can manage your financial affairs effectively. For example, if you have a loved one who has a good head for figures and a keen understanding of your financial situation, they might be an ideal candidate.
In Georgia, the agent’s responsibilities under a financial power of attorney may include:
- Managing your bank accounts
- Taking care of your bills
- Investing your money
- Filing your tax returns
- Selling your property
- Making other financial decisions
As a fiduciary, the agent is ethically obligated to act in your best interest, avoid conflicts of interest and keep detailed, accurate records. It’s important to note that understanding these responsibilities can significantly assist in ensuring that your financial affairs are handled in a manner that aligns with your wishes and best interests.
You may also consider selecting a successor agent who will take over if your primary agent is unable or unwilling to fulfill their duties.
Fill Out Georgia POA Form
The next step is to obtain and fill out a financial power of attorney form. It’s important to use a form specific to Georgia – known as the Statutory Form Power of Attorney – as it will be tailored to the legal requirements of the state. This form can be found through online legal service providers, at your local county clerk’s office or from the Georgia Department of Human Services.
Accuracy is paramount when filling out the form. You’ll need to provide details such as the names and addresses of the principal and agent, the specific powers granted, and the duration of the power of attorney. Any inaccuracies or omissions could have legal ramifications, so it’s crucial to fill out the form meticulously. Thoroughness in this step can help avoid potential issues further down the line.
Sign and Notarize POA Form
The last step in creating a financial POA is signing and notarization. In Georgia, the document must be signed by the principal in the presence of a notary public and at least one adult witness.
Notarization verifies the authenticity of the POA and may help in preventing fraud. For instance, if the document is ever challenged, the notary’s record can provide evidence that the principal appeared before them and appeared to understand what they were signing.
When Does Financial Power of Attorney Take Effect?
In Georgia, a financial power of attorney typically goes into effect as soon as it is signed by the principal, unless specified otherwise. This means that the agent can begin acting on behalf of the principal immediately upon execution of the document.
Some individuals, however, may choose to delay the effectiveness of the power of attorney until a specific event occurs, such as incapacity.
If a future event is what initiates the power of attorney, the principal can designate a person who will determine when that event has occurred.
Terminating Financial Power of Attorney in Georgia
Several events can trigger the termination of a power of attorney in Georgia. These include the death of the principal, the resignation of the agent or the accomplishment of the purpose for which the power of attorney was created. As an example, if a principal assigns power to an agent for the sell a property, the POA would cease to exist once the property gets sold.
Georgia law states that a power of attorney automatically ends when the principal dies. This termination needs no further action from the agent or any other party. In simpler terms, if the principal dies, the power ends right away, and the agent cannot make decisions on behalf of the principal anymore.
On the other hand, a power of attorney in Georgia can end when the principal becomes incapacitated, but only if the document “expressly provides that it is terminated by the incapacity of the principal.” As a result, power of attorney is automatically durable in the Peach State, unless the document explicitly states that it should end upon the principal’s incapacitation.
Lastly, a principal can also terminate a power of attorney at any time, as long as they are mentally competent. This involves letting the agent, and any institutions or individuals, get a copy of the document to notify about the termination.
Bottom Line
Knowing how a financial power of attorney works can help you safeguard your financial affairs, especially during physical or mental incapacity. Georgia law stipulates that the financial power of attorney is typically durable unless stated otherwise, ensuring uninterrupted management of one’s finances even during incapacitation. Additionally, creating a POA in Georgia involves careful steps such as appointing a trusted agent, filling out the POA form accurately, and getting it notarized.
Estate Planning Tips
- Whether you’re taking a DIY approach to protect your estate or work with an expert, several estate planning documents are vital to have, including a will, beneficiary designation forms and a health care power of attorney, among others.
- A financial advisor who specializes in estate planning can help you make important decisions regarding your assets and succession plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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