Understanding Colorado Financial Power Of Attorney
A Colorado financial power of attorney, also known as a general power of attorney, allows your agent to make financial decisions for you.
Typical decisions include the ability to pay bills, cash checks, access your bank accounts, and make other financial decisions you would typically make on a daily basis.
An agent’s powers are limited to those that you grant in a written document. A power of attorney lawyer can help you understand what powers you should give your agents and what affect it may have on you.
In Colorado, a power of attorney is durable unless the power of attorney states otherwise. A durable power of attorney means that the agent can make decisions for you even if you are incapacitated.
If you become disabled, the agent that you designate ahead of time can immediately step in and handle your financial affairs. This is important because it may avoid a costly conservatorship or guardianship proceeding that is needed if you do not have a power of attorney in place.
It is important to speak to a qualified estate planning attorney to draft your power of attorney. If you wish to include “hot powers” which includes such things as disclaimers, changing beneficiary designations, making gifts requiring specific authority and various other powers, it is crucial that you understand the consequences and how to properly grant the power.
What happens to me?
The agent has authority with you, so your rights are not taken away. Only a conservatorship or guardianship can legally take away certain rights away from you.
You can revoke an agent’s powers under a power of attorney at any time.
It is important to notify the agent in writing that they can no longer act on your behalf. It is also important to notify any bank or other institution that the agent’s power is revoked. A bank or other financial institution may rely on the durable power of attorney inadvertently if you do not let them know the agent cannot act on your behalf.
How Do I Know the Agent is Not Misusing the Power of Attorney?
An agent is a fiduciary, which means that he or she must act with the highest degree of good faith. The agent must keep records of their actions if those actions need to be reviewed.
Does a Power of Attorney Need to be Notarized or Witnessed?
Colorado law does not require a power of attorney to be witnessed or notarized.
“A power of attorney must be signed by the principal or in the principal’s conscious presence by another individual directed by the principal to sign the principal’s name on the power of attorney. A signature on a power of attorney is presumed to be genuine if the principal acknowledges the signature before a notary public or other individual authorized by law to take acknowledgments.” Colorado Revised Statute § 15-14-705
Despite the law, it is considered best practice to have the document signed, notarized, and witnessed by two people. Why? The signature is presumed to be genuine if the power of attorney is notarized.
Why it is a Good Idea to Witness & Notarize a POA
There are a number of scenarios when it is helpful to have a power of attorney notarized. For instance, if a power of attorney is to be used during a real estate transaction, ensuring the POA is real will be useful since notarization is required if the transaction is recorded by the agent.
Also, states have different laws surrounding powers of attorney. Some states may require that a power of attorney be witnessed in order to utilize it. So, it you expect to execute the power of attorney out of state, it is wise to go ahead and have it signed, notarized, and witnessed. .
Finally, many financial institutions are reluctant to accept a non-notarized powers of attorney, and there is no penalty if the bank does not accept the POA. So if you expect your agent to conduct financial business on your behalf, you should consider having the document notarized.
Contact Us for Help
If you suspect the misuse of your power of attorney, you need to request an “accounting.” A lawsuit can also be filed against an agent for breach of fiduciary duty and other claims. If you prevail, the court can order return of the misused funds, attorney’s fees and other damages. Call 303-688-0944 for an assessment.