A non-durable power of attorney can be useful in Santa Fe for delegating critical legal and financial tasks to an agent without giving them unlimited authority across all situations.
Unlike durable POAs, a non-durable power of attorney becomes ineffective when the issuer (known as the principal) is incapacitated. This arrangement is most commonly used when someone has a specific task in mind for their agent. It may also be used when individuals prefer that someone closer to them, such as a spouse or adult child, take over with a durable power of attorney during their incapacitation.
A non-durable power of attorney can provide benefits within a broad range of situations, but be aware that it leaves you unprepared for a possible loss of legal capacity. To ensure that you make the best use of this document while also forming a complete estate plan, refer to an experienced lawyer at New Mexico Financial Law. A lawyer can provide you with guidance to create plans that fulfill your goals while leaving you prepared for nearly any scenario.
Schedule a confidential, no-obligation case review to discuss creating a non-durable POA in Santa Fe when you call our firm at (505) 503-1637 or contact us online.
All powers of attorney created in Santa Fe — and anywhere else in New Mexico — are automatically considered durable unless the principal explicitly says that the document is terminated by their incapacity (NM Stat § 45-5B-104).
If the principal chooses to have their power of attorney in Santa Fe be automatically revoked after they have been incapacitated, this document is referred to as a non-durable power of attorney.
All powers of attorney give authority to another party (who is known as the agent, proxy, or attorney-in-fact) to act on behalf of the person issuing the power (who is known as the principal).
A durable power of attorney remains in effect even after the principal has lost the ability to manage their financial and legal affairs. This state is referred to as incapacitation.
While in this state, the incapacitated individual may make decisions contrary to their best interests. They may also be manipulated, confused, or misled into making a decision they never would have made when they still had capacity.
Non-durable powers of attorney may be appropriate for situations where the principal needs assistance or representation for key tasks and responsibilities, but they do not want their agent to continue to hold authority after they have been incapacitated.
There are two main types of powers of attorney:
Medical powers of attorney are always durable. They also do not activate until the principal is incapacitated, making them a “springing power of attorney.
Financial powers of attorney can be either durable or non-durable. They can also be general or limited.
A general financial power of attorney gives the agent permission to handle nearly any transaction or interaction that the principal could. New Mexico POA laws describe in detail the exact abilities an agent would possess when they are authorized under a general power of attorney.
Examples of actions an agent can take on behalf of the principal under a general financial power of attorney include the ability to:
A limited power of attorney restricts the agent’s ability to perform all of these actions. The exact limitations are determined by the principal and recorded in their power of attorney.
It would be unusual — but not impossible — for a non-durable power of attorney to be general. Typically, if a principal is only willing to grant an agent permission to handle their affairs while they have capacity, they would not want the agent to possess unrestricted powers.
Accordingly, many non-durable powers of attorney in Santa Fe are created for an express purpose. For example, a business owner might give a member of their staff permission to handle legal matters and conduct business transactions as a matter of course. Someone may also hire a financial assistant to help the principal manage certain financial affairs while they are out of the country.
A non-durable power of attorney may also be temporary. Some transactions or professional services may require a client to give someone short-term legal authorization to handle a specific task or interaction. Common examples of a situation where a services provider might request temporary power of attorney include:
Note that, while limited and temporary powers of attorney are typical when using a non-durable POA in Santa Fe, a principal can assign general powers if they wish. The arrangements they make should depend on their needs, the risks they anticipate, and the goals they want to accomplish. They can discuss their options with an experienced lawyer to create a power of attorney in Santa Fe that is likely to satisfy all of their requirements.
To create a non-durable power of attorney, you need a written document. In the document, you should carefully and specifically describe the arrangements you want using the recommended legal language.
Your document should describe in detail things like:
To ensure that the language used is capable of enforcing the arrangements you want, you can consult with a lawyer during the creation of your document. Your lawyer can recommend specific phrases, clauses, and details to include so that your non-durable power of attorney is capable of achieving the goals you had in mind.
Once the document is complete, it should be signed and notarized (NM Stat § 45-5B-105). It becomes effective immediately — or upon an activation condition set by the principal if they choose to delay it.
All powers of attorney are automatically revoked upon the death of the principal. Also, a principal can decide to include other automatic conditions that activate the revocation of their power of attorney. To make their power of attorney non-durable, they need to clearly state that the agent’s powers are revoked when they have been incapacitated.
The principal can also add other conditions. For example, they can make their non-durable power of attorney’s expiration automatically occur after their agent completes a specific task, like closing a home sale or working out a settlement with the IRS. The principal can also specify that the non-durable power of attorney only lasts for a set number of days.
Otherwise, the principal can revoke their non-durable power of attorney at any time while they still have legal capacity. They can describe revocation methods as part of their arrangements, such as being able to terminate the agreement with a simple text, email, or phone call.
Regardless of the method used for the revocation of a power of attorney, the principal should always create their revocation in writing, sign it, and have it notarized.
State law (NM Stat § 45-5B-102) defines incapacity in the context of a financial power of attorney as an “inability of an individual to manage the individual’s estate or financial affairs, or both.”
This inability could result from a medical condition that makes them vulnerable. Or, it could involve other circumstances demonstrating that the principal is incapable of making sound financial decisions on their own.
Incapacitation can also describe a situation where the principal is:
To have their non-durable power of attorney automatically revoked when needed, the principal can also define their incapacitation in a specific way. They should mention that this condition may not meet the technical definition of incapacity, but that it should satisfy the requirements for the non-durable power of attorney arrangements to be automatically terminated.
The principal can leave the decision of whether they are incapacitated to a specific individual that they name in their non-durable power of attorney. This person can be a family member, a doctor, or a trusted professional like their financial advisor.
If they fail to specifically authorize an individual to determine their capacity — or this person is unavailable for any reason — then the decision can fall to a physician, a licensed psychologist, an attorney at law, a judge, or an appropriate government official (NM Stat § 45-5B-109).
For many reasons, including several which are described above, a non-durable power of attorney can be the best option for someone, especially when they need their POA for a highly specific purpose or task. The document’s non-durable status is usually a reflection of the need for a limited and/or temporary arrangement.
A durable power of attorney, on the other hand, can be highly useful in a situation where you are incapacitated and cannot — or should not — access your own finances. The most common scenarios where this might happen are when someone loses consciousness for an extended period because of an accident or a medical condition. However, their debilitation can also have developed slowly, as is the case with conditions like dementia or Alzheimer’s disease.
When loved ones or others with a concern for a person’s well-being notice that the person is having difficulty managing their own money and other affairs, a durable power of attorney can be practically essential. With this document, an agent can help the principal avoid making mistakes, mismanaging their funds, or falling victim to scams. The agent can instead help them maintain their money and handle important legal business for as long as needed.
Durable power of attorney is especially recommended by organizations like the New Mexico Bar Association in case of a medical emergency. While you are incapacitated, you and your loved ones may desperately need someone who is authorized to access your accounts to pay for medical bills and basic living expenses. Because of the dire nature of this scenario, a durable power of attorney can be a source of relief and support.
Talk to a Santa Fe estate planning lawyer to get personalized recommendations for the best POA arrangements in light of your unique circumstances and goals. Your lawyer may suggest creating a non-durable power of attorney for some situations while still having a durable one reserved, just in case an emergency arises.
Your lawyer can also explain principal and agents’ legal rights, methods to prevent POA abuse, and other strategies that can help you address your specific objectives or concerns. With a personalized plan in hand, you can be prepared for nearly any scenario while ensuring that your agents always inspire trust.
New Mexico Financial Law wants to help you achieve all of your financial and legal goals while planning for the future. Creating a non-durable power of attorney can sometimes be the option for certain situations.Make the right arrangements for your specific needs, and get advice on how to personalize your non-durable power of attorney to work best for you by reaching out to our law firm today. Schedule a confidential case review with no further obligations when you call us at (505) 503-1637 or contact us online today.
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