Understanding Financial Power of Attorney in Wisconsin
A financial power of attorney (POA) is a legal document that gives another person the authority to make financial decisions on your behalf. This can be helpful if you are unable to make these decisions yourself, such as if you are incapacitated or out of the country.
In Wisconsin, the legal framework for financial POAs is set forth in Chapter 244 of the Wisconsin Statutes. These statutes establish the requirements for creating a valid POA, the powers that can be granted to an agent, and the duties of the agent.
Situations Where a Financial Power of Attorney May Be Necessary
There are many situations where a financial POA may be necessary. Some common examples include:
- If you are going to be out of the country for an extended period of time and need someone to manage your finances while you are away.
- If you are incapacitated and unable to make financial decisions for yourself.
- If you have a disability that makes it difficult for you to manage your finances.
- If you are elderly and need help with managing your finances.
Types of Financial Power of Attorney in Wisconsin
Wisconsin law recognizes several types of financial power of attorney, each with varying scopes and limitations. Understanding the differences between these types is crucial for choosing the one that best aligns with your specific needs and goals.
General Power of Attorney
A general power of attorney grants the agent broad authority to handle all financial matters on behalf of the principal. This includes managing bank accounts, paying bills, selling property, and making investments. The scope of a general power of attorney is typically very broad, giving the agent significant control over the principal’s financial affairs.
Limited Power of Attorney
A limited power of attorney, also known as a special power of attorney, grants the agent authority to handle specific financial matters only. This type of power of attorney is often used when the principal wants to give someone limited authority for a specific purpose, such as selling a particular piece of property or managing a particular investment account.
Durable Power of Attorney
A durable power of attorney remains in effect even if the principal becomes incapacitated. This means that the agent can continue to manage the principal’s financial affairs even if the principal is unable to do so due to illness, injury, or mental incapacity. A durable power of attorney is often used to ensure that someone has the authority to handle the principal’s financial affairs in the event of incapacity.
Springing Power of Attorney
A springing power of attorney only becomes effective upon the occurrence of a specific event, such as the principal’s incapacity. This type of power of attorney is often used when the principal wants to give someone authority to handle their financial affairs only if they become incapacitated.
Choosing the Right Type of Power of Attorney
The type of financial power of attorney you choose will depend on your specific needs and goals. If you need someone to have broad authority to handle all of your financial affairs, a general power of attorney may be the best option. If you only need someone to handle specific financial matters, a limited power of attorney may be sufficient. If you are concerned about becoming incapacitated, a durable power of attorney can ensure that someone has the authority to handle your financial affairs even if you are unable to do so. And if you want to give someone authority to handle your financial affairs only if you become incapacitated, a springing power of attorney may be the best option.
It is important to consult with an attorney to discuss your specific needs and goals before creating a financial power of attorney. An attorney can help you choose the right type of power of attorney and ensure that it is drafted in accordance with Wisconsin law.
Creating a Financial Power of Attorney in Wisconsin
Creating a financial power of attorney in Wisconsin involves several steps to ensure the document is legally valid and meets the specific requirements of the state.
The process includes defining the scope of authority granted to the agent, selecting a trustworthy and capable individual, and adhering to the legal formalities.
Requirements for the Document
To create a valid financial power of attorney in Wisconsin, the document must meet the following requirements:
- Written and Signed: The power of attorney must be in writing and signed by the principal (the person granting the power).
- Two Witnesses: The document must be witnessed by two disinterested individuals who are not related to the principal or the agent.
- Notarization: The power of attorney must be notarized by a notary public, who will verify the identity of the principal and the witnesses.
Tips for Drafting a Clear and Comprehensive Power of Attorney
When drafting a financial power of attorney, it is essential to ensure that the document is clear, comprehensive, and tailored to the specific needs of the principal.
- Specify the Scope of Authority: Clearly define the powers granted to the agent, including the types of financial transactions they are authorized to perform.
- Consider Durable Powers: Include a “durable” clause to ensure the power of attorney remains valid even if the principal becomes incapacitated.
- Provide Specific Instructions: Include any specific instructions or limitations on the agent’s authority to avoid potential misunderstandings.
- Review and Update Regularly: Regularly review and update the power of attorney to ensure it remains relevant and reflects the principal’s current wishes.
Using a Financial Power of Attorney in Wisconsin
A financial power of attorney is a powerful legal document that gives someone the authority to manage your financial affairs. It’s important to understand the responsibilities and duties of the agent under a financial power of attorney, as well as the process for using the power of attorney to manage financial affairs.
Responsibilities and Duties of the Agent
The agent under a financial power of attorney has a number of responsibilities and duties, including:
- Acting in the best interests of the principal
- Keeping accurate records of all financial transactions
- Making regular reports to the principal
- Avoiding conflicts of interest
- Following the principal’s instructions
Using the Power of Attorney
To use a financial power of attorney, the agent must first present the original document to the financial institution or other entity with which they are doing business. The agent will then be able to access the principal’s accounts and make transactions on their behalf.
Some common transactions that may be handled by an agent under a financial power of attorney include:
- Paying bills
- Depositing checks
- Withdrawing funds
- Investing money
- Selling property
Terminating a Financial Power of Attorney in Wisconsin
Terminating a financial power of attorney in Wisconsin is a serious matter that requires careful consideration. There are several methods for terminating a power of attorney, each with its own legal implications.
Revocation by the Principal
The principal (the person who granted the power of attorney) can revoke the document at any time, as long as they are of sound mind. This can be done by:
*
- Notifying the agent (the person who holds the power of attorney) in writing.
- Destroying the original power of attorney document.
- Executing a new power of attorney that specifically revokes the previous one.
Termination by Operation of Law
A power of attorney automatically terminates upon the death of the principal or the agent. It also terminates if the principal becomes incapacitated or if the purpose of the power of attorney has been fulfilled.
Court Order
A court may terminate a power of attorney if it finds that the agent is misusing the power or is not acting in the best interests of the principal.
Consequences of Termination
Terminating a power of attorney has several consequences:
* The agent’s authority to act on behalf of the principal immediately ceases.
* Any transactions entered into by the agent after termination are void.
* The principal may be liable for any debts or obligations incurred by the agent while the power of attorney was in effect.
It is important to seek legal advice before terminating a financial power of attorney to ensure that it is done properly and to understand the legal consequences.
