In Arkansas, there are many powers of attorney, each designed for specific purposes, such as managing financial matters, making healthcare decisions or handling real estate transactions. By understanding the different types and legal requirements for creating a valid document, individuals can ensure that their wishes are carried out and their interests are protected, even in the face of unexpected incapacitation or extended absence. This guide will break down what you need to know. But if you need help with your own estate planning then you may want to talk to a financial advisor.
How a Power of Attorney Works in Arkansas
A power of attorney is a legal tool that allows individuals to appoint someone they trust to handle important matters on their behalf. In Arkansas, this document must be signed by the principal and notarized. It must also include specific language stating that the agent has the authority to act on behalf of the principal and that the principal is of sound mind and under no undue influence at the time of signing.
The scope of authority granted by a power of attorney in Arkansas can be broad or limited, depending on the language used in the document. However, certain actions, such as creating or modifying a will, cannot be delegated through a power of attorney.
An agent under a power of attorney has a legal and ethical obligation to act in the best interests of the principal and to avoid any conflicts of interest. This includes keeping accurate records, not commingling funds, and making decisions that align with the principal’s wishes and values. Agents who breach their fiduciary duties may face legal consequences, such as civil liability or criminal charges.
Types of Powers of Attorney in Arkansas
Arkansas recognizes six main types of power of attorney: general, limited, durable, non-durable, springing and medical. Some of these can be used for multiple purposes:
- General power of attorney: A general power of attorney is a legal document that grants an agent broad authority to act on behalf of the principal in various financial, legal and personal matters. Under a general power of attorney, an agent can make decisions and take actions such as managing bank accounts, signing contracts, filing taxes and buying or selling property on behalf of the principal.
- Limited power of attorney: A limited power of attorney is a legal document that grants an agent authority to act on behalf of the principal for specific, limited tasks or transactions. Unlike a general power of attorney, a limited power of attorney restricts the agent’s authority to specific actions, such as selling a particular piece of property or managing a specific investment account.
- Durable power of attorney: A durable power of attorney is a legal document that remains in effect even if the principal becomes incapacitated or mentally incompetent. Unlike other types of power of attorney, a durable power of attorney continues to be valid even if the principal is no longer able to make decisions for themselves due to illness, injury or mental incapacity.
- Non-Durable power of attorney: A non-durable power of attorney is a legal document that automatically terminates if the principal becomes incapacitated or mentally incompetent. The key difference between a durable and non-durable power of attorney is that a non-durable power of attorney becomes invalid the moment the principal is deemed incapacitated or mentally incompetent.
- Springing power of attorney: A springing power of attorney is a legal document that only takes effect upon a specific triggering event, such as the principal’s incapacitation. Unlike a durable power of attorney, which is effective immediately, a springing power of attorney “springs” into action only when the specified triggering event occurs. The triggering event is typically the principal’s incapacitation, as determined by a physician or other designated professional.
- Medical power of attorney: A medical power of attorney, also known as a healthcare power of attorney or advance directive, is a legal document that grants an agent the authority to make healthcare decisions on behalf of the principal if they become incapacitated. Under a medical power of attorney, the agent can make decisions regarding the principal’s medical treatment, such as consenting to or refusing medical procedures, selecting healthcare providers and determining end-of-life care preferences.
Once you understand how each works then it can help you choose the right power of attorney so that you can get your needs, or the needs of a loved one, met.
How to Create a Power of Attorney in Arkansas
To create a valid power of attorney in Arkansas, the document must be in writing, signed by the principal, and notarized. The principal must be at least 18 years old and mentally competent at the time of signing. Arkansas law requires specific language to be included in the document, such as a statement that the power of attorney shall not be affected by the subsequent disability or incapacity of the principal. The Arkansas Statutory Form Power of Attorney (Arkansas Code § 28-68-301) provides a template that meets all legal requirements.
To create a power of attorney in Arkansas, follow these six general steps:
- Determine the type of power of attorney needed based on your specific circumstances and goals.
- Choose a trusted and competent person to serve as your agent or attorney-in-fact.
- Download or obtain the appropriate Arkansas power of attorney form, such as the Arkansas Statutory Form Power of Attorney.
- Fill out the form completely, specifying the powers granted to the agent and any limitations or restrictions.
- Sign the power of attorney in the presence of a notary public.
- Provide a copy of the executed document to your chosen agent and any relevant third parties, such as banks or healthcare providers.
When selecting an agent for your power of attorney, it is crucial to choose someone you trust implicitly to act in your best interests.
Bottom Line
A power of attorney is an important legal tool that allows individuals to appoint a trusted agent to handle their affairs, ensuring continuity and protection of their interests. By understanding the different types of power of attorney available in Arkansas, individuals can make informed decisions about the level of authority they wish to grant and the specific circumstances under which it should apply. Creating a valid power of attorney involves careful consideration in choosing a reliable and competent agent, adhering to legal requirements, and regularly reviewing and updating the document to reflect changing life circumstances.
Tips for Estate Planning
- Estate planning can be difficult to figure out because of all the different pieces to understand to protect your wishes and your assets. A financial advisor can help you work through the entire estate plan process and make sure your wishes are met when it comes to your assets. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Before you dive into building your own estate plan, make sure you understand the potential dangers of DIY estate planning.
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