A power of attorney (POA) is a legal form that allows a person, the agent, to make decisions on behalf of another person, the principal, who may not be able to make decisions for themselves. This could be due to a variety of reasons, including being out of the country or being incapacitated.
Depending on the type of POA a principal creates, its validity can last until the task has been carried out or until the principal dies. A principal can also revoke a power of attorney for various reasons. For example, they may be able to make their own decisions, but no longer trust the person they gave the power to, or they have found someone else more suitable to act on their behalf.
Defining Power of Attorney in Indiana
A Power of attorney (POA) is a legal document that gives a designated individual the authority to manage another person's financial, legal or medical affairs in the event of permanent illness, disability or when that person cannot otherwise be present to carry them out themselves.
This representative is known as the agent or "attorney-in-fact" and has the power to act on behalf of another person, or principal. An agent may have broad or limited powers over the principal depending on the type of POA they have created.
An Indiana POA can end for many reasons, including:
- The principal revokes the agreement.
- The principal dies.
- A court invalidates the POA.
- The agent can no longer carry out their responsibilities under the POA.
- When the agent is married to the principal and they separate or divorce.
Choosing a POA in the State of Indiana
A principal who needs an agent should choose wisely, as it grants to someone immense power and responsibility and can be a matter of life or death for the principal. A principal can also face financial ruin if they name the wrong person as their agent.
Therefore, it is essential that they choose someone capable and trustworthy who will act with the same legal authority as they would. An agent's mistakes may be difficult to correct, and they may act in their own best interests rather than those of the principal.
A person who serves as an agent can be any competent adult, such as an accountant, attorney or banker. Agents may also be a spouse or a family member such as an adult child, sibling or parent. Giving a family member power of attorney will save money on fees paid to a third party, and there is a greater likelihood of keeping confidential information about the principal.
Granting Power of Attorney Under Indiana Law
To set up a power of attorney in Indiana, the agent and principal fill out and sign a power of attorney form that is reflective of their circumstance. They can find templates for the type of form they'll need online and get help from an attorney to fill it out. The principal lists the required duties for the agent on the POA document.
Indiana requires the principal to hire a notary public to witness the signing of the form. The notary will also sign the form, adding their printed name and notarial seal, which must be visible.
Principals can find a notary at a financial institution or hire a mobile notary to visit them at home or work. Print and mail establishments also have notaries on staff, as do law firms. After they complete the form, they will make copies of it and give them to the agent and anyone else affected by it. The principal should store the original POA in a safe location, like a safe deposit box or a locked fireproof cabinet, and let the agent know where it is.
Who Should Create a Power of Attorney?
All adults should create a power of attorney, as there may be a time when they will not be able to manage their day-to-day affairs, or there will be occasions when they are simply unavailable to do so. For example, a person may need a POA under these common circumstances:
- They have plans to travel abroad, either temporarily or permanently.
- They have health issues, limited mobility or are aging.
- They live in a residential care facility and need help with their affairs.
The principal has to set up the POA for themselves – their family can't get one for them after they no longer can manage their own affairs. If a person can't assign a POA, a court will appoint a guardian or conservator for that person when they are incapacitated, and neither they or their family would control that decision.
Types of Powers of Attorney Documents
The types of powers of attorney that a principal needs will depend on how long the agent's authority will be valid, when it comes into effect, and what areas of the principal's life they will control. Various types of POAs are:
- Durable or non-durable power of attorney.
- General power of attorney.
- Financial power of attorney.
- Medical power of attorney.
- Minor power of attorney.
- Limited or special power of attorney.
- Springing power of attorney.
An estate planning attorney may charge considerable fees to draft a POA. However, the principal can reduce this expense by completing the form themselves and hiring a lawyer to simply review it.
Durable vs. Non-durable Power of Attorney
A durable power of attorney (DPOA) becomes effective immediately after the principal signs it and allows the agent to continue acting on their behalf if they become incapacitated. A durable POA ends as soon as the principal dies. The principal can revoke the power at any point, as long as they are competent.
A non-durable POA expires immediately when the principal is incapacitated or dies. Most types of powers of attorney can be made durable or non-durable.
Defining General Power of Attorney
A general power of attorney gives an agent broad authority to act on behalf of the principal. They will make business, financial, legal and real estate decisions including:
- Managing the principal's banking transactions.
- Buying and selling property on the principal's behalf.
- Paying their bills.
- Entering into contracts for the principal.
A general POA gives the agent extensive control over the principal's affairs, so a principal may want to use it only for a short time when they cannot manage things themselves. A general POA expires upon the principal's incapacitation (unless it is durable) or upon their death.
Limited Power of Attorney in Indiana
A limited or special POA gives an agent the authority to act on the principal's behalf for a specific purpose only. For example, a limited POA can allow an agent to cash a principal's checks for them or to sell a piece of real property, but may not allow the agent to manage their finances overall.
A limited POA expires once the agent has completed the specific task outlined on the form. A principal can create more than one limited POA, granting each agent different authority.
Defining Springing Power of Attorney
A springing POA goes into effect if a particular event or medical condition occurs – typically when the principal becomes incapacitated. Once the event comes to pass, the agent "springs" into action on behalf of the principal. Although a springing POA ensures the agent can't act until the principal becomes incapacitated, the process of determining that the principal cannot make their own decisions isn't always so straightforward.
For example, if the principal develops dementia, it may not be immediately apparent that they cannot manage their affairs; doctors, family members and their agent may all have different opinions about their level of incapacitation. This could mean that the agent can't act on behalf of the principal right away, and it can delay many vital decisions for that person.
Medical Power of Attorney in Indiana
An advance directive, or medical POA, allows the principal to name a healthcare agent, a person who would make medical decisions for them if they cannot do so. For example, the agent will make decisions regarding the principal's:
- Medical treatments.
- Surgical procedures.
- Artificial hydration and nutrition.
- Organ donation.
- Choice of healthcare facilities.
- Release of medical records.
The agent will ensure that healthcare providers provide medical care as specified in the principal's Do Not Resuscitate (DNR) directive or living will. A medical POA becomes effective immediately after the principal signs it, but the agent can make health care decisions only after a doctor declares the principal mentally incompetent.
Financial Power of Attorney in Indiana
A financial POA gives an agent the authority to act on a principal's behalf regarding their finances. For example, the principal may grant the agent the power to make the following financial decisions:
- Pay bills and family expenses.
- Make deposits and withdrawals at their bank.
- Manage their retirement benefits.
- Sell or rent property.
- File taxes.
The principal can choose the specific powers they want the agent to have. Financial POAs may be durable or non-durable, depending on the principal's preferences.
Defining Minor Power of Attorney
In Indiana, a parent can create a minor child POA, enabling them to select an agent to make decisions concerning a minor. This POA allows the agent to act in a parental capacity to ensure that the child has adequate care and custody.
Indiana allows an agent's authority over a minor to remain in effect for no longer than 12 months or as long as the minor is in the care of an institution. After that time expires, the POA is void, and the principal must execute a new one to reinstate the representative's right to act on behalf of the minor.
How to Revoke a Power of Attorney in Indiana
There are many reasons why a principal may want to revoke a POA, such as:
- The principal no longer needs the POA because they can make their own decisions.
- The principal no longer trusts the agent.
- The principal has found another, more suitable candidate to act as their agent.
- The agent may have moved away, died or is no longer part of the principal's life.
A principal can revoke a POA by signing a new one or filing a power of attorney revocation form. This will cancel the authority given to the agent in the original document. A competent principal can withdraw a POA at any time, from wherever they are.
- Investopedia: Power of Attorney (POA)
- In.gov: Power of Attorney (POA)
- Freewill.com: 5 Types of Power of Attorney, Explained
- Eforms: Indiana Power of Attorney for Minor Child Form
- NWI Times: Estate Planning: Revoking a Power of Attorney
- Find Law: Indiana Durable Power of Attorney Laws
- Find Law: Do I Really Need a Power of Attorney?
Michelle Nati is an associate editor and writer who has reported on legal, criminal and government news for PasadenaNow.com and Complex Media. She holds a B.A. in Communications and English from Niagara University.