Arranging power of attorney is an essential part of estate planning, business continuity planning, and healthcare planning. Anyone at any age could unexpectedly find themself in a situation where they are unable to handle financial transactions or make decisions about their own healthcare. By giving someone in Las Cruces power of attorney now, you can know that there is someone who can act in your best interests when the need arises.
You should always put careful thought into how you structure your power of attorney, though, as well as who you give it to. Working with an experienced Las Cruces lawyer can help you understand all of the choices you have when providing power of attorney, including the option of whether only to have it activate when you are incapacitated. With their knowledge of having handled other powers of attorney in the past, your lawyer can offer recommendations to ensure that your plans work out as intended.
Come to New Mexico Financial Law if you ever need assistance with any areas of estate planning. You can speak to an experienced lawyer in Las Cruces during a confidential, no-obligation consultation when you call (505) 503-1637 or contact us online.
A power of attorney is the name of a document that authorizes someone to act with the same authority as you on your behalf. The person drafting the power of attorney is known as the “principal,” and the person who receives authority is known as an “agent” or an “attorney in fact.”
A power of attorney can be created using any language that makes it sufficiently clear that the principal is granting authority to an agent. The scope of that authority should be described as specifically as is needed to fulfill the duties expected of the principal. The principal can also use language to delay the activation of their power of attorney, such as by making it effective at a later date or only when they have been incapacitated.
The principal must then sign this document in front of a notary (NM Stat § 45-5B-105). Without notarization, it may be difficult for the agent to prove that the signature is genuine at a later date.
There is a standard New Mexico statutory POA form available that provides for a wide range of general authority. The principal can customize the form to limit the powers to only the categories of activities required by the principal. However, this form still gives sweeping powers to the agent, including ones that may not be necessary for the principal to achieve their goals.
To ensure that the language you use and the powers you grant align with your needs, expectations, and strategic plans for the future, have an experienced Las Cruces POA lawyer review any document you intend to execute
The principal can specify whether they want their chosen agent to have the ability to conduct financial transactions, make healthcare decisions, or both. Alternatively, they can create separate documents for healthcare and financial powers of attorney if they intend to name different agents for each type of authority.
Financial power of attorney gives the agent the ability to do anything authorized by the principal. This can include:
Many other capabilities can be obtained with a general power of attorney for financial matters. Review New Mexico statutes amended Chapter 45 Article 5B sections 204–217 for a complete list.
Even with a general financial power of attorney, there are certain things an agent cannot do unless they receive specific authorization from the principal. These include making gifts, creating or revoking a living trust, adding or changing beneficiary designations, and delegating their power of attorney to someone else. See NM Stat § 45-5B-201 for a complete list of these powers excluded from a general power of attorney.
The principal can also choose to select just a few capabilities for their agent to perform, creating what is known as a limited power of attorney. Refer to a Las Cruces lawyer for personalized guidance and advice based on your goals and the situations you want to be prepared for.
Note that, in addition to issuing a power of attorney, you may need to complete specific authorization forms for each bank or financial institution. Refer to the policies of individual businesses to understand what would be necessary for them to fully recognize an agent’s authority.
A power of attorney for healthcare gives your agent permission to make key decisions about your care, plan of treatment, providers, and more.
Examples of decisions your healthcare agent could make include:
The principal can record their wishes for the exact types of care they would or would not want to have. They can even get specific about the situation, such as whether they’d like to use a ventilator if they were likely to recover, versus a scenario where their recovery was unlikely.
The principal can grant their agent permission to make decisions on matters not explicitly limited by their instructions for care. Alternatively, they could require their agent to follow only the instructions given, without the ability to make decisions outside of those already made by the principal in their advance healthcare directive.
It is important to carefully review the powers given to an agent and to understand that limitations to their powers could affect the quality of care you receive. Remember that some treatments and healthcare elements are important for providing comfort to a patient, not just for seeking to cure their condition. At the same time, the principal understands better than anyone what they would want in order to preserve their dignity in a situation where they were incapacitated.
To select the right balance of powers and permissions, you can have in-depth conversations with your intended agent, your loved ones, and a Las Cruces legal professional who has extensive experience with medical powers of attorney.
A power of attorney can be durable, meaning that it remains in effect even when the principal has been incapacitated.
For healthcare power of attorney, at least two physicians must determine incapacity. The principal can designate a physician who must be consulted (if it is reasonably possible to do so) before a determination of incapacity is made.
For financial power of attorney, a physician can make a determination of incapacity, but so can an attorney, a judge, or another person designated by the principal in their power of attorney document.
Durable powers of attorney are important since they can prevent catastrophic situations where no one has the legal authority to make medical decisions or handle important matters of business. Without a power of attorney, a loved one or other concerned party has to seek guardianship and/or conservatorship over the incapacitated person. This can be a lengthy and complicated process, introducing delays when key decisions must be made or actions taken.
However, if someone does not wish to have their power of attorney remain active when they become incapacitated, they can issue a non-durable power of attorney. Once incapacity has been determined, these become invalid, removing the agent’s authority.
A power of attorney is effective the moment it is executed, unless there is language that delays its activation. The principal can choose to have the power of attorney activate at a specific future date, or they could create a contingency condition that causes the power of attorney to activate automatically. The latter situation is sometimes called a “springing power of attorney.”
The most common situation for a springing power of attorney is that it activates when the principal has become incapacitated.
Individuals who have been given power of attorney have a legal obligation to act in the best interests of the principal when it comes to the actions they take on their behalf. They must take active steps to avoid actions that would benefit them and not the principal or their loved ones. These obligations are referred to as a “fiduciary duty.”
Individuals in a fiduciary position can be held liable by the principal or an interested party affected by any improper actions of the agent.
The agent’s duties, as generally outlined in New Mexico laws (NM Stat § 45-5B-114), include a legal obligation to:
An agent also has an obligation to fulfill their duties when they acknowledge that they have been granted authority under a power of attorney (see NM Stat § 45-5B-120). In other words, they can’t accept the role at one point and then back out at the last minute, especially if the principal has been incapacitated.
A power of attorney can be revoked at any time while the principal has capacity. They can do so by physically destroying all copies of the document, but it would be more prudent to also create and sign a written revocation letter and have it notarized.
All banks and other financial institutions should receive notice of this revocation of power of attorney, as well, to prevent a situation where the agent still has access because of a lack of communication or verification.
A power of attorney is a critical component of incapacity planning and estate planning, in general. As mentioned above, if no one is granted power of attorney, there may be cumbersome legal workarounds required.
For example, someone who jointly owns a home with someone who is incapacitated could not legally sell the home without the incapacitated person’s specific authorization and financial power of attorney. Often, the parties with an interest in the principal’s affairs will need to seek a conservatorship or guardianship order from a court before they have any legal authority to conduct transactions on an incapacitated person’s behalf.
With a power of attorney arranged, an individual can quickly step into the needed role to manage the principal’s affairs. The smoother the transition, the better, since delays can cause unnecessary stress and lead to issues like missed payments on an important lease. Worse, in a medical situation, delays could compromise the patient’s well-being or put them in a situation they explicitly wanted to avoid. Since springing powers of attorney require a determination of incapacity before they can come into effect, such delays and corresponding issues may occur. Having a non-springing power of attorney, therefore, can provide advantages for the continuous and seamless management of business, finances, and critical healthcare decisions.
Creating a Las Cruces power of attorney is an important step in making sure that you and your family can be taken care of, even in an emergency. Many people choose their closest loved ones or advisors to serve in these roles, so think of it as a way for the people who depend upon you to step up and return the favor.
Our Las Cruces estate planning law firm can help you review and understand all of your options for creating powers of attorney. You can decide how specific or general you want the authority granted to your agent(s) to be, based on the likely scenarios you want to plan for and any risks you want to mitigate.
When you come to New Mexico Financial Law, our only goal is to enable you to walk away with peace of mind, knowing that some of the most important decisions for yourself, your family, and your business can be left to someone you deeply trust. Call us at (505) 503-1637 or contact us online to schedule a no-obligation appointment and discuss your Las Cruces power of attorney with a team you can confidently depend upon.
CallCall now to schedule your consultation 505.503.1637
Office