What is a Georgia Statutory Power of Attorney?
Regardless of age or financial status, everyone can benefit from having a power of attorney. A Georgia Statutory Power of Attorney allows you to name someone you trust as the manager of your finances for your benefit if you are unable to manage your assets yourself. A Georgia Statutory Power of Attorney can be effective immediately or can become effective only if you are incapacitated (called springing). If no one is named as a power of attorney, your assets may be frozen and inaccessible, even for your use, until a conservatorship is created. A conservatorship is the court process for a judge to name someone to manage your finances. Anyone can petition to be a conservator, and the person appointed may not be the same person you would have selected.
A Georgia Statutory Power of Attorney cannot be used when you pass. An agent's power ceases, and probate must be initiated upon the death of an account holder. A Georgia Statutory Power of Attorney must be created before dementia sets in and should be created well in advance so no argument can be that you were unduly influenced. To be valid, a Georgia Statutory Power of Attorney requires the signature of the creator, a witness (not the agent) and a notary.
What Assets Are Managed
A Georgia Statutory Power of Attorney, while a statutory form, can be customized for each person. The document provides options allowing you to grant or withhold powers over each asset. In the first part of the power of attorney, called the “general powers,” you would generally allow all the powers in this section as they are what allow your agent to effectively manage your finances (bank account access, filing taxes for you, paying your mortgage, etc.). The second section, the “specific powers,” primarily deals with beneficiary designations, trust creation, disclaimer of inheritance, etc., and may be powers you may not generally grant to an agent. The Georgia Statutory Power of Attorney is different from other power of attorney forms because it has the power of the Georgia legislature behind it. In 2017, a new power of attorney statue was passed which states that if a Georgia Statutory Power of Attorney is used, a financial institution cannot reject the document outside of a good faith basis. This means that you no longer have to fill out each company's power of attorney. This single form can be used at all financial institutions in Georgia.
Example 1: Becky is twenty-five and doesn't own much, but she does have a checking account and 401(k) through her employer. Becky has rent, utilities, taxes, a car payment, and other financial obligations. During her morning commute, Becky gets into a car accident that leaves her in a coma for two weeks and in the hospital for a month. During that period, Becky is unable to direct her finances or make decisions about her financial obligations. If Becky had a Georgia Statutory Power of Attorney, that person could take care of her financial obligations for her.
Example 2: George is 83 years old and is starting to exhibit signs of dementia. George can live independently for the moment but forgets to pay his bills on time and cannot remember where all his accounts are. However, George made a Georgia Statutory Power of Attorney that named his son, Henry, as his agent. Henry can pay George's bills, file his taxes, direct his investments, and, when the time comes, sign a contract for George to move to an assisted living facility.
Planning for the future can save your family time, money, and make life easier. A power of attorney can avoid the need for court oversight and reporting through a conservatorship and assure that the person you trust is managing your finances for you. While we cannot foresee every future event, we can plan for it. Let Drew Eckl & Farnham help you plan for all of life's circumstances.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.