Arizona Power of Attorney FAQ

paper with Arizona Power of Attorney and pencil tipWhen it comes to estate planning, financial and medical powers of attorney ensure your wishes are honored. However, questions abound. What is the difference between durable and general powers of attorney? What can you include? How do you choose an agent?

This Arizona Power of Attorney FAQ answers the more common questions (hence the title, FAQ). However, if you want further information, feel free to contact the team at Cholewka Law, or leave a comment below for us to answer.

What is a power of attorney?

A power of attorney (POA) is a legal document in which you authorize another person (or persons) to act on your behalf. This person is called your agent, and the powers granted him or her depend on the provisions you make in your POA.

You may draft an extremely specific power of attorney, granting your agent limited authority. For example, if you purchase a home in another state, you may create a POA granting your agent the authority to sign the deed on your behalf. On the other hand, you may choose a general power of attorney, granting your agent the authority to do just about anything, from running your business to signing checks to selling property.

What is a durable power of attorney?

A standard POA only remains active until your death, its provisions are fulfilled, or you become incapacitated. This means that, if you are deemed mentally incompetent, such as after a dementia diagnosis, or fall into a coma, your power of attorney is no longer valid.

A durable power of attorney remains in effect even after you become incapacitated. This allows your chosen agent to continue acting on your behalf, according to the provisions of your POA. In the absence of a durable power of attorney, if you become incapacitated, the court names an guardian and/or conservator to make decisions for you.

Ideally, you have two durable powers of attorney, a medical POA and a financial POA. A durable POA remains in effect until your death, or until you revoke it.

What is a durable financial power of attorney?

This legal document authorizes your agent to make financial decisions on your behalf. This includes signing deeds, selling assets, paying bills, and filing taxes. Legally, your agent must act in your best interests.

What is a durable medical power of attorney?

This legal document authorizes your agent to make medical decisions on your behalf in the event of an emergency and if you are incapacitated. It is different from a living will, as your POA agent has the authority to make decisions not covered by other advance directives.

Can anyone in Arizona have a power of attorney?

Arizona law allows any person over the age of 18, who is of sound mind, to have a power of attorney.

What is the Principal on a power of attorney?

The Principal is the person drafting the POA and granting authorization for an agent to act on his or her behalf.

What is the Attorney of Fact on a power of attorney?

The attorney of fact is the person you choose to act as your agent or representative in a POA. This person does not need to be an attorney; he or she simply represents your interests.

Do I have to know the person who witnesses my signature on a power of attorney?

No. The only requirement in Arizona is that the witness be at least 18 years old and of sound mind.

Why do I need a power of attorney?

There are many reasons you might need a power of attorney. A durable POA, especially, protects you and your assets in the event you become incapacitated and are no longer able to manage your affairs. This includes tasks such as selling assets and paying bills.

If you were to have an accident or become ill without a POA, your family must petition the probate court to assign a guardian and/or conservator. The court uses a standard hierarchy, with no guarantee that the person the court assigns follows your personal wishes. Typically, the court assigns an agent in this order:

  • Spouse (unless legally separated)
  • Adult child
  • Parents
  • Siblings
  • Aunts or uncles
  • Cousins

How does my bank or mortgage company know about the power of attorney?

After authorizing your power of attorney, your attorney may record it with the County Recorder. This makes your POA public record, which means anyone looking for it, such as your bank, easily finds it. It also ensures your agent’s ability to prove his or her authority to act on your behalf.

You do not have to record your POA with the County Recorder’s Office. Usually it is only recorded if the agent is selling the Principal’s real property. In either case, your agent or agents need a copy of the document in order to act on your behalf.

When does a power of attorney go into effect?

Once the power of attorney is signed and notarized, it becomes effective, unless the document states otherwise. Once you give the POA to the person you name as agent, he or she may use it. Choosing the right agent protects you.

Is there any risk to creating a financial and medical powers of attorney?

Yes, there is, especially if you choose poorly when selecting your agent. The person you choose has legal access to any property authorized in the POA, as well as the ability to make legal decisions on your behalf. If this person makes foolish decisions or takes off with your money, you have little legal recourse.

What’s more, you are responsible for your agent’s actions when he or she acts on your behalf. This includes paying for property if your agent signs a sales contract (assuming he or she was given authority over your financial affairs), whether or not you want that property.

When choosing your agent, take great care to choose someone you trust to act responsibly and in your best interests. Your attorney can help you select the right person.

Can I revoke a financial and medical powers of attorney?

Yes. If you never gave the agent the POA, you only need to destroy the document (as long as you also never gave it to any institutions, such as your bank).

If you already recorded the POA, or gave it to the agent or an institution, work with your attorney to create a revocation document, which becomes effective once it is signed and notarized. Afterward, give copies of the revocation to anyone who had the original POA.

If you filed the original POA with the County Recorder, you must also file the revocation.

Does a financial and medical powers of attorney need to be renewed or updated?

You may want to re-execute your POA occasionally (every five years or so), even if you experience no changes. You definitely want to review it every few years, just to make sure it still represents your wishes.

What sorts of actions may I authorize my agent to do?

You have a number of options in your power of attorney. In most cases, if you can do it, your agent can do it. Some actions include:

  • Applying for benefits on your behalf, such as Social Security and Medicare
  • Buying and selling property
  • Cashing checks
  • Collecting debts owed to you
  • Filing lawsuits on your behalf
  • Making investments
  • Managing and/or running your business

In your power of attorney, you specify which actions you authorize your agent to perform, and when those authorizations take effect. You may make broad provisions, as well, such as “managing financial affairs” or “making medical decisions.” However, some provisions require specificity in order to be valid. These include:

  • Changing community property agreements
  • Designating beneficiaries on insurance policies
  • Making gifts of your property (including money)

Your agent may not be granted the power to make or change your will, nor vote in elections on your behalf.

When I create a power of attorney, do I lose control over my money?

No, you retain control over all of your property, including finances, though your POA gives your agent access to said property. That means that an unscrupulous agent may take advantage of this authority. Again, choosing the right agent, someone you can trust, is vital.

Can my agent take or sell my property without my permission?

Yes, because the power of attorney grants that permission, depending on the powers authorized by the POA. Even though your POA is little more than a piece of paper, in reality it is the equivalent of trusting that person with your property. Again, protect yourself by choosing a trustworthy agent.

Am I able to continue acting independently after signing a power of attorney?

Yes, your POA does not take precedent over your own decisions. If you and your agent disagree, you have final say. However, if your agent acts on your behalf and then you disagree, the agent’s action stands. If your agent disrespects your wishes, you may revoke the POA at any time.

If you have a durable power of attorney and your agent believes you now lack the mental capacity to make sound decisions, he or she may petition the court for guardianship. At this point, the court determines your mental capacity, relying on the testimony of expert witnesses such as psychologists.

What can I do if I think my agent is stealing from me?

Your first step is talking to your attorney and revoking the power of attorney. Next, notify all financial institutions included in the POA that it has been revoked.

From there, you and your attorney file a demand with the probate court, requiring the agent to file an accounting of your money and property. The court schedules a hearing and, if it finds that the agent stole from you, you may sue and/or press criminal charges.

May I assign more than one agent to a power of attorney?

Yes, you may, but that does not necessarily mean that you should. Confusion and conflict are not uncommon in these situations. Before assigning more than one agent, discuss the pros and cons with your attorney.

You may also assign a secondary agent who takes over for the primary agent. Typically, you would name this person to serve in the event your first choice predeceases you.

Do I have to have an attorney prepare my power of attorney?

No, Arizona does not require an attorney to complete or file these documents. However, financial and medical powers of attorneys are often complicated and involved legal documents, bestowing a great deal of power on an individual. Consulting with an attorney is strongly recommended.

If you have any questions that were not covered in this article, please post your comment below, we will respond promptly.

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