General Power of Attorney

There may come a time in life when injury or illness leaves you or a loved one unable to handle financial, medical and tax decisions. This stressful situation is only compounded at times by the fact that the person’s loved ones are unsure of what decisions should be made on the incapacitated person’s behalf or who should make them. However, if a person executes a power of attorney while they are still competent, they can somewhat remedy the issue. Power of attorney allows a person to designate a specific person with the legal authority to make certain decisions on the other person’s behalf.

There are three main types of power of attorney in North Carolina: general, health care, and consent to health care for a minor. This article examines general power of attorney.

By state law, the person selected to act with general power of attorney (the agent or “attorney-in-fact”, although the person does not have to be an attorney) must act in the best interests of the person on whose behalf they are acting (the “principal”). The agent cannot be compensated for their services, although reasonable reimbursement for expenses is allowed. The general power of attorney process in North Carolina gives the principal options as to 1) when the power of attorney will take effect, and 2) the areas in which they want the recipient to have authority to act.

• Springing power of attorney: Does not “spring” into effect until the principal becomes incapacitated or mentally incompetent.

• Durable power of attorney: Goes into effect once the power of attorney form is signed, notarized and filed with the correct legal authority, usually the register of deeds. Contains a provision that the power of attorney will have the same effect if the principal becomes incapacitated or mentally incompetent. Durable power of attorney does not take away the principal’s right to make their own decisions, but allows the agent to step in if needed.

• Limited power of attorney: If the principal wants the power of attorney to terminate upon a certain date or event, they can add this into the power of attorney document. Either a springing or durable power of attorney can be limited.

North Carolina’s “short-form general power of attorney” form gives the principal the opportunity to choose the topic areas over which they want the agent to have control. The principal can opt to give the agent power over the following matters belonging to the principal:

• Real and personal property transactions. Real property refers to real estate and houses; personal property refers to the person’s other assets, both tangible and intangible.
• Stock and security transactions
• Banking transactions
• Business operating transactions
• Safe deposit box access
• Insurance transactions (including health and life insurance)
• Estate transactions
• Social security and unemployment
• Personal relationships and affairs
• Benefits from military service
• Tax matters
• Employment of other agents such as legal counsel or other professional representation
• Charitable donations and gifts to those other than the attorney-in-fact
• Renunciation of property interests.
• The principal can also opt to give the agent what is called the power of revocation and substitution. This means that the agent could appoint another person to act as the principal’s attorney-in-fact (substitution) and later revoke the appointment (revocation).

If the principal designates their agent authority for the “personal relationships and affairs” subcategory, the agent will have the power to do any act necessary for maintaining the accustomed standard of living for the principal and their spouse and dependents. This includes “providing” medical, surgical and dental care and necessary hospitalization. On a related note, the “insurance transactions” option permits the agent to manage the principal’s health and life insurance affairs. Although these two topics lightly touch on the issue of health care decisions, a medical power of attorney is often a more suitable vehicle to address medical decision preferences in the event that the principal cannot make the decision themselves or are unable to communicate a decision.

If you are facing a family law or personal injury issue involving power of attorney, it is important to speak with a local attorney experienced with that area of law. Arnold & Smith, PLLC is a multi-practice civil and criminal litigation firm in Charlotte, North Carolina. Our dedicated attorneys represent clients on a wide variety of topics in the areas of family, personal injury and criminal defense in the Queen City and surrounding areas. Contact us today to schedule an initial consultation with one of our attorneys about your case.