Duration of Financial Power of Attorney: Misconceptions Exist

Posted by Jeffrey N. Berman on

In Georgia, a statutory financial power of attorney can authorize a third party to manage an individual’s property and financial matters. Georgia does not require a financial power of attorney form, however, BFV recommends its clients use the statutory financial power of attorney form for several reasons.  One reason is that a financial institution is more likely to readily accept the statutory form than it would be if another financial power of attorney is presented.

When does a statutory financial power of attorney terminate?
A statutory financial power of attorney can be “durable” or “non-durable.” A statutory financial power of attorney that is durable continues to be effective during the incompetency or incapacity of the person signing the statutory financial power of attorney (the “Grantor”). A non-durable statutory financial power of attorney terminates upon the incompetency or incapacity of the Grantor. 

In my experience, the unexpected termination of a statutory financial power of attorney can have devastating consequences. Imagine that you are handling all financial matters for an older adult and the statutory financial power of attorney terminates. If the Grantor cannot execute a new statutory financial power of attorney, then the holder of the now terminated statutory financial power of attorney must file a Petition in the appropriate Probate Court in Georgia to be named as the Conservator of the older adult. This process and the required Probate Court oversight is time consuming, cumbersome, costly and frustrating. 

In Georgia, a statutory financial power of attorney terminates when:

(1) the Grantor becomes disabled or incapacitated and the power of attorney is not durable;
(2)   the statutory financial power of attorney specifically states it will terminate upon a date or event, or;
(3)   most importantly, the Grantor of the statutory power of attorney dies. 

Many people who are granted powers under a statutory power of attorney believe that the statutory power of attorney survives the death of the Grantor. The fact is that a statutory financial power of attorney terminates on the death of the Grantor.  Unfortunately, I’ve witnessed many times the sheer surprise and concern when a person learns that he or she no longer has the authority to handle a Grantor’s estate once the Grantor has passed away. Do not make this mistake. When planning, be sure that the Grantor also signs a Last Will and Testament that authorizes someone to handle the Grantor’s financial and related matters post-death.

As you can imagine, there are many different types of powers of attorney for personal and business use. Do your homework in advance with a legal professional. At Berman Fink Van Horn we can help you with all types of powers of attorney. Please contact us if we can help.