- posted: Mar. 30, 2022
- Estate Planning
A power of attorney is a legal document that authorizes one person to make financial, legal or medical decisions in behalf of another. The creator (called the “principal”) may choose the circumstances in which the designated person (called the “agent” or “attorney in fact”) may exercise the power. One such circumstance is when the principal becomes incapable of making rational decisions on their own. But it can be difficult to determine when and to what extent this incapacity has occurred.
By Arizona statute, the principal must have been “of sound mind” when the power of attorney was executed. This must be evident to the notary or other public official and witnesses present at the time of signing. A third party can challenge the legality of a power of attorney based on the principal’s alleged lack of capacity at that time.
A more common issue that arises is whether the principal has suffered a subsequent loss of capacity that empowers the agent to act. A power of attorney by its terms may either be “immediate” or “springing.” The former means that the agent can legally act on the principal’s behalf right away, while the latter means that the agent’s powers only take effect if and when the principal has lost his or her capacity. Sometimes the criteria and requirements for determining mental incapacity are expressly stated in the power of attorney.
If the power of attorney is silent as to determining mental capacity, the decision is often left up to an administrative body or a court. Legal capacity disputes can be complicated and often involve expert witnesses.
In view of the possible problems that can arise once the capacity of a principal becomes an issue, a power of attorney should be completed with the help of an experienced professional. Anyone involved in creating a power or seeking to act on one should seek the advice and counsel of a qualified estate planning lawyer.
Located in Mesa, the Law of Offices of Joseph M. Udall, PLC provides complete estate planning services for Arizona residents. In addition, our firm represents out of state clients who have family or other interests in Arizona. We maintain flexible hours for virtual meetings. Please feel free to contact us online if you have an estate planning matter or call (480) 500-1866 for an initial phone consultation.