Minnesota Short Form Power of Attorney
Short Form Power of Attorney
Power of Attorney. It’s a common term. It’s a useful document. Yet, many people do not fully understand just exactly what it is and how it works. When a person needs someone else to be able to act for them, almost “assume their identity," they can achieve this by giving someone else a power of attorney. The Principal is the person that gives away the power. Share may be a better term, because the Principal still retains the right to act. The Attorney in Fact is the person who receives or shares the power. The form is available free at the State of Minnesota Registrar of Statutes. You can read the statute, Chapter 523, to receive specific information on the rights and obligations associated with short forms for power of attorney. Specifically, there is a four page PDF of the form at www.revisor.mn.gov/statutes/?id=523.23&format=pdf.
Most people consider creating short form powers of attorney simply because it’s a great first step in estate or incapacity planning. It can also be convenient. Now that the forms are available free, on line, there is really no reason to delay in having one in place. Life is uncertain. Anything can happen to anyone at anytime. If you were incapacitate, they old “what if you were in a car accident today" approach, who would manage your financial affairs? Who would cash your checks? Who would pay the bills? Some of the most simple of transactions, may be left undone. Having a short form power of attorney completed, and letting your proposed attorney in fact know of its existence, can be incredibly useful.
Once you give someone power of attorney, they stand in your legal shoes. It is as if they ARE you, legally. Because it is such broad and sweeping power, it should only be given to people that you can absolutely trust. Also, since it often is not used unless or until someone is absent or incapacitated, the form should be stored in an accessible place to the person who will act as the attorney in fact. If it is stored in a safety deposit box, the attorney in fact must already be named on the safety deposit box to retrieve it. Most people keep the Short Form Power of Attorney somewhere under their own control. The Principal informally lets the Attorney in Fact know where they can find it if they need it.
People often ask me, in the context of divorce representation, “Can my mom/ dad/ brother / sister act as my power of attorney, and act on my behalf in a divorce proceeding?" Sometimes this question is asked if someone if going to be absent from the State for a while, such as in the military. Sometimes, they simply do not want to have to engage in the process, and participate in meetings with a soon to be former spouse. Sometimes, they are struggling with health issues, and need to avoid the stress. An Attorney in Fact can act on behalf of a Principal, and participate in divorce proceeding.
Completing, or executing, the Short Form Power of Attorney is fairly straightforward. Please be aware that the form is expected to change soon! If it does, it is wise to make new originals, if the Principal still has the ability or capacity to do so.
It is important to make many, many originals. Some institutions, such as banks, require that the original remain on file with them. And, the short form power of attorney is often only used after someone is incapacitated, and not able to make more of the document. It is best to plan ahead.
You only need to make a few choices when filling out the document. The form has a few areas which have capitalized headings, that correspond to the advice below.
PRINCIPAL: Fill in the name of the person that is giving, or sharing, the powers to transact business to someone else.
ATTORNEYS IN FACT: The name or names of people who are being given the power. It can be convenient to allow them to work independently, but if there is any question about trustworthiness, having them act jointly should be marked.
If you want them to act jointly, mark the box below.
SUCCESSOR ATTORNEYS IN FACT: This is room for additional people if the people originally named cannot act.
EXPIRATION DATE: Most people do NOT fill in an expiration date, unless they are using the Power of Attorney for a very narrow purpose. Most people create the power of attorney to be used if they are incapacitated, so they do NOT want it to expire during a time when they are unable to create a new one.
FIRST: Most people check N, which allows ALL powers to the attorney in fact. Only if the document is being used for a narrow transaction do we limit it. If the form is being executed to allow for real estate transactions, then the legal description must be included on line A. If a street address only is included, the form will not be sufficient to transact real estate transactions. If the legal description is unknown, you can check N, allowing all powers, and then the absence of a legal description will not invalidate the ability to conduct real estate transactions.
SECOND: Most people use the power of attorney for transactions when they are incapacitated, so they DO want the power of attorney to BE EFFECTIVE even if they become incapacitated.
THIRD: This may seem like a strange choice, whether to allow the person to transfer property to themselves. If a person becomes incapacitated, or needs nursing home or assisted living, it may be an asset protecting move to transfer assets out of the name of the person who gave the power of attorney, and into the name of the attorney in fact. As an example, if a parent gives power of attorney to their child, the child may need to transfer assets into the child’s name as part of asset protection planning. So, usually people check the box that an attorney in fact IS AUTHORIZED to transfer property to the attorney in fact.
FOURTH: Accounting. Most people only give power of attorney to someone that they trust, so the common answer is that the attorney in fact will only give accountings when requested.
Signature of Principal: This must occur in the presence of a notary public. The person giving away the power signs the line above “Signature of Principal."
NOTARY: The notary fills out everything under “Acknowledgment of Principal" Notaries are available not only at financial institutions, but many pharmacies have notaries on staff. Since many pharmacies are also open twenty-four hours, it is a convenient option for people who can’t make it to the bank during business hors.
If an attorney drafts the document, they will fill out the lines under “this instrument was drafted by." It can be helpful to have the Specimen Signature of Attorney in Fact filled out. The attorney in fact signs, but it does not have to be in front of a notary. Then, if the form is lost, there is no risk someone else can fill in the signature.
Do yourself, and your family a favor. Get those Short Form Powers of Attorney signed. It only takes a few minutes, but can save hours of time and hassle in the future. Forward the link to the form with anyone you think may benefit from having this form in place. In the past, clients needed an attorneys assistance to draft these forms. Attorney advice can be helpful to make the choices, but it is also pretty straight forward. Feel free to contact our offices if you have any questions about filling out the form.