If you couldn't handle your own bills, bank accounts, or paperwork for a while, who would you want doing it for you? And what would you want that person to be allowed to do?
That's the question a power of attorney answers. So what is a power of attorney? It's a legal document that lets you give someone else authority to act on your behalf. Most people sign one while they're perfectly capable of managing their own affairs, because that's when they can make the choice themselves.
What a power of attorney actually does
There are two people involved. The person who signs the document and gives the authority is the principal. The person who receives the authority is the agent. Missouri's statutes call the agent an "attorney in fact," which confuses a lot of people. Your agent doesn't need to be a lawyer. It's usually a spouse, an adult child, a sibling, or a trusted friend.
The document gives the agent legal permission to step in and act for you in certain matters. Banks, title companies, and others can then deal with your agent the way they would deal with you.
What can your agent handle?
That depends on what the document says. A power of attorney can be broad or narrow.
A broad one might let your agent manage your bank accounts, pay your bills, file your taxes, deal with insurance, and handle property. A narrow one might cover a single task, such as signing closing documents on a house sale while you're out of state.
The authority comes from the document, not from the title. Your agent has the powers it gives them and no others. Missouri law also requires an agent to act as a fiduciary, which in plain terms means they're handling your affairs for your benefit, not their own.
Medical decisions are a separate matter. Missouri handles health care authority under its own set of laws, so a financial power of attorney shouldn't be assumed to cover medical decisions.
Signing one doesn't mean giving up control
This is one of the most common worries, and it's understandable. Handing someone legal authority over your finances sounds like losing it yourself.
In general, it doesn't work that way. Signing a power of attorney gives your agent the ability to act. It doesn't take away yours. While you're able to manage your own affairs, you can keep doing so, and you can revoke the document if you change your mind.
What it does mean is that someone else can act in the areas the document covers. That's why the choice of agent matters so much.
What does "durable" mean?
In everyday terms, "durable" means the power of attorney keeps working if you become unable to make decisions for yourself.
That matters because the moment you need help the most is often the moment you can't sign anything new. In Missouri, a power of attorney only continues through incapacity if it's written as a durable power of attorney. The statute requires specific language saying so, and the document has to be signed, dated, and notarized.
Powers of attorney also don't all start at the same time. Missouri allows one to take effect as soon as it's signed, or to be written so it takes effect later, such as when the principal becomes incapacitated. Each approach has practical tradeoffs. Either way, the authority generally ends when the principal dies. After that, the estate is handled under the will and Missouri probate law.
Why create a power of attorney before you need one?
Because the decision is yours to make only while you're able to make it.
People sign one when they're putting together an estate plan, after a marriage or other major change, or before a surgery. Business owners and people who own land sometimes want someone ready to handle matters that can't wait. Others simply want the question settled. None of that depends on age. An illness or accident can happen at 35 as easily as 75.
Choosing the person you trust with the authority
Your agent may be able to move money, sign documents, and deal with your property. That's real authority, so the choice deserves some thought.
Trust is the starting point, but it isn't the only thing that matters. You'll also want someone reliable, organized enough to keep track of bills and records, and willing to take it on. It helps if they live close enough to deal with the bank in person. Being your spouse or oldest child doesn't automatically make someone the right choice.
Many people also name a backup agent, so someone is available if their first choice can't serve. Choosing an agent is a bigger topic than this article can fully cover.
Power of attorney and guardianship aren't the same thing
A power of attorney is a document you sign yourself, while you're able to make your own decisions. You choose the person and decide what they can do.
A guardianship or conservatorship is a court proceeding. It usually comes up when someone can no longer make their own decisions and doesn't have documents in place that cover what's needed. In that case, a probate court decides who will have authority and what that authority includes. In Missouri, guardianship covers personal decisions and conservatorship covers finances.
Having a power of attorney doesn't guarantee a court process will never be needed. It does give you the chance to make the choice yourself rather than leaving it to a court.
Where a power of attorney fits into your estate plan
A will takes effect after death. A power of attorney works during your lifetime. They cover different stretches of time, which is why most estate plans include both.
A trust can also be part of the picture, depending on what you own and how you want it managed. These documents work together as part of an overall estate plan.
Talking it through
You don't need to know what kind of power of attorney you need before you call. Michael Yenzer handles estate and succession planning at Schmanke Law Firm. He can talk with you about what you want someone to be able to handle, who you're considering naming, and when you want the authority to apply. He'll also discuss whether you want limits on that authority and how the document fits with the rest of your plan.
At its core, a power of attorney is about deciding who can act for you and what they're allowed to do. If you'd like to talk through yours, the firm meets with clients in Union and Owensville.
