Few relationships hold more legal power than spouses, except for a parent's or legal guardian's authority to make decisions on behalf of their children. Marriage bestows more than 1,138 federal rights and benefits on the wedded couple, including the tax-free transfer of property and division of marital property upon divorce.
However, being married may not mean that someone has the final say in all matters. Find out what power of attorney is and whether it supersedes the rights of the spouse.
What is the power of attorney's power?
If your spouse has given someone else power of attorney over certain matters, you may not have the final say. A power of attorney grants another person or entity decision-making power over some or all matters just as if you decided yourself. A general power of attorney terminates if you become incapacitated. A durable power of attorney remains in effect after incapacity or death. The person who executes a power of attorney is generally referred to as the "principal," and the person granted authority is called an "agent."
"The impact of entering into a durable power of attorney versus a non-durable power of attorney can be significant and varies from case-to-case. A principal should always seek out the advice of a competent estate planning attorney before executing either document," says attorney Joseph Landolfi from Shapiro Blasi, a law firm in Boca Raton, Fla.
Powers of attorney are general or narrow, says Terrence Freeman, an attorney with Nason Yeager in Palm Beach Gardens, Fla. "Non-durable powers are generally given for a limited purpose or transaction, such as a real estate closing, so they only give the powers needed for that purpose and for a limited time. Durable powers of attorney, by contrast, are generally extremely broad in scope, granting the maximum range of powers allowable," he says.
Durable powers of attorney are typically broadly worded to allow the agent to manage the principal's financial affairs, such as banking, paying bills, managing loans, filing taxes, accessing public benefits, and handling property, securities, and other assets. In Florida, some specific powers may require specific signatures or initials to be included in the power of attorney instrument because they are dangerous in the wrong hands, Freeman says.
Who has the final word in your legal matters?
In general, a power of attorney supersedes the wishes of a spouse, says Scott E. Rahn, founder and co-managing partner of Los Angeles law firm RMO. "Often, a power of attorney is given to another family member, business partner or another trusted adviser with specific expertise in a given discipline, like an attorney, CPA or business manager," he says. A non-spouse may be better able to manage the specific property, business, etc. for the benefit of the principal or the principal's family, including the spouse. The agent is usually the executor or trustee of the principal's will and trust, too, Rahn says.
Because a power of attorney grants someone the ability to act as your legal representative in the matters authorized in the instrument, Rahn advises considering several factors before choosing an agent. "The single most important thing to answer honestly when considering whom to nominate as power of attorney is the following question: Will this person be capable of utilizing the power I am giving them for my benefit and the benefit of my family should I become incapacitated?" he says.
What should you consider before choosing an agent?
Rahn advises thinking about a number of factors before answering that question. Does the person:
- Share my values?
- Have the experience to handle my business, financial, legal, and personal affairs?
- Have the emotional maturity needed to handle the duties they will need to undertake as my agent?
- Have the time needed to handle my affairs and their own affairs?
- Have enough financial security that they will not take advantage of the opportunity?
- Have enough resourcefulness that they will be able to manage unfamiliar situations?
- Have the ability to navigate my family's personalities and dynamics?
The last question is particularly relevant when nominating one of several children, a step-parent to children, or a non-family member. "Far too many people fail to answer many, all too often any, of these questions and instead simply [select] their spouse, eldest child, [or] all of their children," says Rahn. And this, he adds, "will all but ensure disastrous results."
Assigning anyone a power of attorney should carefully consider the scope and consequences before granting such power. Review your plan with a knowledgeable attorney who can help you safeguard your rights and ensure adherence to your wishes.