A power of attorney (POA) is a powerful estate planning tool that allows one person, who in legal terms is called the “principal,” to designate another person (potentially more than one person) as their attorney-in-fact. The power of attorney document authorizes the attorney-in-fact to act as the principal’s agent in all matters covered by the POA. These powers may be narrower or broader, depending on how the power of attorney is written. They may also be divided into separate spheres of concern; a general power of attorney is often tailored to govern financial matters, while a power of attorney for health care will grant authority for medical decision-making. Although Missouri and Kansas law offers “standard” language that forms the basis for most powers of attorney in the state, often these documents are customized to ensure that they correspond to the needs and concerns of the principal in each specific situation. Call our Kansas City estate planning lawyers at The Binder Firm to schedule a consultation and learn more about your options for powers of attorney in Missouri and Kansas.
There are three main types of POA in Missouri and Kansas. Each has its own uses and is tailored to meet a specific set of needs. The same individual may need one, two, or all three, depending on their estate planning goals and personal circumstances.
A general power of attorney under Mo. Rev. Stat. 404.710 allows for a great deal of customization. The powers granted to the agent by the principal may extend to “all lawful subjects and purposes” or be limited to certain areas of activity. Often, and especially when a POA is set up as part of an individual’s long-term care planning, these delimited areas may be matters related to the management of the principal’s personal finances.
States differ somewhat in how they construe the scope of a POA and in whether the “default” case is presumed to cover all areas of activity vs. reserved to those explicitly outlined in the instrument that creates the power of attorney. The powers granted to an agent in a power of attorney are typically construed broadly unless the POA specifically limits the authority of the attorney-in-fact to specific contexts or types of actions. If an individual preparing a power of attorney as part of their long-term care planning arrangements wishes to limit the scope of authority bestowed upon an agent, then it is important to include terms that explicitly delineate the areas in which the agent is and is not authorized to act.
The presumptive breadth of authority granted to the agent in a general power of attorney does not, however, automatically apply to situations in which the principal has become disabled or incapacitated. A power of attorney that is intended to be active even if and when the principal is disabled or incapacitated will need to incorporate terms explicitly granting this authority.
The precise wording allows for some flexibility based on each principal’s individual needs, but the language used must contain provisions substantially similar to those outlined in Mo. Rev. Stat. 404.705. The goal with this type of power of attorney is to ensure that a trusted party will be able to carry on with the management of the principal’s affairs, particularly his or her financial arrangements, even if a time comes when the principal is unable to receive and interpret crucial decision-making information, make informed choices on the basis of that information, and communicate those choices effectively.
Missouri is one of several states in which the authority to make medical decisions on an individual’s behalf is assigned using a specific type of power of attorney. In Missouri, this document is called a durable power of attorney for health care. The requirements and rules specific to medical POA are outlined in Mo. Rev. Stat. 404.800-872, but one of the key distinguishing factors of a durable power of attorney for health care is the requirement established under 404.825, which requires certification by a medical professional of the principal’s incapacity before the power of attorney for health care may take effect. You may also notice that “durable” is the only type of POA listed for health care; this exclusivity is due largely to the fact that the only circumstances under which a power of attorney for health care may be used are those in which only a durable power of attorney will remain valid.
One of the more common POA questions our estate planning attorneys at The Binder Firm receive is whether an individual preparing his or her estate plan can name more than one agent in a power of attorney. The answer is generally yes, but the way you approach creating the instrument to designate multiple attorneys-in-fact may depend somewhat on whether you want each of these individuals to have identical authority.
One of the more common POA questions our estate planning attorneys at The Binder Firm receive is whether an individual preparing his or her estate plan can name more than one agent in a power of attorney. The answer is generally yes, but the way you approach creating the instrument to designate multiple attorneys-in-fact may depend somewhat on whether you want each of these individuals to have identical authority.
Estate administration always has to be carried out in some form, regardless of whether the deceased person left behind a valid Will, and even if there is no property to distribute via intestate succession (some people do leave behind more debts than assets). Most states, including Missouri and Kansas, have some form of simplified administration for “small” estates (usually defined in terms of the estimated value of the total property in the individual’s estate) that have relatively simple assets (complex asset management strategies or disputes over ownership may disqualify even a very small estate from an expedited administration). These simplified forms are the ones that tend to see the greatest variation in nomenclature from one location to the next; the primary method of expedited non-probate administration for small estates is the procedure for administration via “small estate affidavit,” under the provisions of Mo. Rev. Stat. 473.097.
Sometimes, the individual you would be inclined to trust most with your personal medical decisions may not necessarily be someone you would also trust to handle your finances, and vice versa. The people we love and rely on each have their own distinct strengths and capabilities, and there is no slight implied to any of your loved ones in naming different individuals as agents in your general power of attorney vs. in your durable power of attorney for health care.
Before you designate an attorney-in-fact for either of these scenarios, consider carefully the personal qualities of the individual you plan to name. A durable power of attorney for health care may benefit from having an agent who lives close to you (so that he or she can come to a medical facility quickly in case of an emergency), and in most cases, this person should ideally be someone who spends significant time with you on a regular or semi-regular basis.
We usually find that estate planners feel the greatest peace of mind when the attorney-in-fact named in a durable power of attorney for health care is someone the principal trusts to understand intuitively what the principal themselves would decide if they were able to make medical choices on their own behalf. This kind of understanding may not have the same importance in a general power of attorney; instead, you might want to prioritize for that agent someone who regularly makes well-considered, intelligent business and financial decisions and whom you trust to recognize and apply your priorities when they make those decisions in your place.
There are a number of reasons why Missouri and Kansas residents may want to include a general power of attorney in their estate plans. The reasons for incorporating a durable power of attorney for health care are arguably even more widespread. Certainly, anyone who is considering long-term care planning should at least consider the possibility of creating powers of attorney to ensure that both their medical decision-making and their personal finances will be in good hands if a time ever comes, as for many people it does, when they are unable to make or communicate their preferences independently in real time.
Because powers of attorney can be highly flexible and customizable, there is no truly “one-size-fits-all” solution. What we at The Binder Firm typically recommend instead is scheduling a conversation with an estate planning attorney to identify key priorities and the most appropriate individuals to designate for honoring those priorities if called on. This conversation can then form the basis for a custom solution tailored to address the issues that matter most to the individual preparing to execute the powers of attorney. We welcome your questions when you contact our Kansas City office.