If you want to empower a loved one or trusted adviser to act on your behalf, including if you become incapacitated and unable to act yourself, you should consider creating a power of attorney to confer that authority.
Executing a power of attorney can have specific legal or financial consequences, making it critical to seek legal counsel to understand what powers of attorney do and the advantages and disadvantages of incorporating one into your estate plan.
Contact Peakstone Law Group, formerly known as Patterson Weaver, today for an initial case review with a lawyer to discuss your legal options for powers of attorney in Colorado Springs.
What Is a Power of Attorney in Colorado?
In a power of attorney (POA), an individual known as a principal empowers another person, called an agent or attorney-in-fact, to make decisions or take actions on the principal’s behalf as if the principal took those actions.
People use powers of attorney to authorize other individuals to act for them, such as signing contracts or undertaking transactions requiring the principal’s presence if the principal cannot attend, or to make decisions if the principal cannot do so due to legal or physical incapacity.
Types of Powers of Attorney
Powers of attorney come in various types, depending on the authority conferred by the principal upon the agent and when the POA becomes effective or terminates. Common types of powers of attorney in Colorado include:
- General power of attorney – A general POA allows an agent to take any action on behalf of the principal that the principal could take for themselves, except where limited by state law.
- Limited power of attorney – A principal may create a limited power of attorney to authorize an agent to take specific actions on behalf of the principal, such as undertaking specific transactions or executing certain contracts.
- Durable power of attorney – By default, a power of attorney ends when the principal loses the legal capacity to make decisions or becomes incapacitated. However, in a durable POA, the principal expressly states that the agent’s authority will continue if the principal becomes legally or physically incapacitated.
- Springing power of attorney – A springing POA refers to a special type of power of attorney that becomes effective only if the principal becomes incapacitated or upon some other designated event, rather than immediately going into effect when the principal executes the document.
- Financial power of attorney – A financial POA allows an agent to handle financial matters for the principal.
- Medical power of attorney – Also called a healthcare proxy, a medical POA allows a principal to empower their agent to make healthcare decisions and end-of-life care decisions for the principal. In most cases, medical powers of attorney take the form of a durable or springing power of attorney, as the principal typically wants the agent to make medical decisions or end-of-life care decisions on their behalf if they become incapacitated and unable to make or communicate those decisions.
Legal Requirements of a POA in Colorado
In Colorado, a person creating a power of attorney must meet specific requirements to have a valid and enforceable POA document. First, the person executing the power of attorney must have the capacity to enter into contracts or handle their legal and financial affairs. Having the legal capacity to create a POA also includes understanding the nature of a power of attorney and the consequences of executing a POA document.
The principal creating a power of attorney must either sign the document themselves or direct another individual to sign it in the principal’s presence for the principal’s benefit. Although Colorado does not require a principal to have their signature on a power of attorney notarized, doing so can help ensure that other parties, such as financial institutions or healthcare facilities, accept the POA as valid. The law presumes the validity of a principal’s signature if the principal signs the POA before a notary public or acknowledges a signature on a POA as theirs to a notary.
If you create a power of attorney that authorizes your agent to conduct transactions involving real estate, you should also file a copy of the POA with the clerk and recorder’s office in the counties where you own real estate. Doing so will ensure the clerk and recorder’s office recognize your agent’s authority to execute real estate documents for you.
Scope and Limitations of Authority Under a POA
A principal can specifically describe the scope of their agent’s authority or put limitations on the agent’s ability to act for the principal. The principal can also set conditions under which the POA goes into effect or terminates.
Revocation and Termination of a POA
A person can revoke their power of attorney at any time if the person remains mentally competent to handle their legal and financial affairs. POAs also automatically terminate under various circumstances, including:
- The principal becomes incapacitated, unless the POA expressly states otherwise.
- The agent dies, becomes incapacitated, or resigns, and the POA does not name a successor agent.
- The POA lists a termination date or events upon which the document terminates.
- A limited POA accomplishes its stated purpose, such as authorizing an agent to act on the principal’s behalf in a specific real estate transaction.
- The principal names their spouse as the agent, and the couple later gets divorced, unless the POA expressly states that it will continue following the parties’ divorce.
Powers of attorney also automatically terminate upon the principal’s death. Finally, courts may invalidate and terminate a POA if they find that a principal lacked capacity when they executed the document or executed it under duress, undue influence, coercion, or fraud.
Benefits of Working with a POA Lawyer from Peakstone Law Group
Working with POA lawyers from Peakstone Law Group to develop a power of attorney for your estate plan can help you achieve your personal and legal objectives by:
- Having an experienced attorney who can sit down with you to discuss your needs, concerns, and goals to determine the suitability of a power of attorney
- Ensuring you understand your options for powers of attorney and the pros and cons of incorporating one into your estate plan
- Creating a power of attorney explicitly tailored to your needs and preferences
- Ensuring that you have a valid, enforceable power of attorney under Colorado law
Contact Peakstone Law Group today for a confidential consultation with a POA lawyer to learn more about powers of attorney and how they may benefit you when you incorporate one into your estate plan. Our firm is ready to help you make informed decisions about using powers of attorney and draft a POA tailored to your needs and objectives.