SCHOFIELD BARRACKS, Hawaii -- A power of attorney (POA) is often recommended to Soldiers, especially prior to deployment.
A POA essentially grants another person, called the "agent," the right to act on behalf of the principal.
There are two basic types of POAs: general and special.
A general POA grants the agent almost all rights to act on behalf of the principal. This fact is true unless it expressly states a specific situation where the agent is not allowed to act.
This definition means, with a standard general POA, the agent has the right to write and cash checks, buy and sell property, register a car, withdraw money from bank accounts, pay utilities and sign contracts. These are only some of the many rights the agent has under a general POA.
A special POA grants one or a few specific rights to the agent, meaning the principal can limit the power of the agent to acting on the principal's behalf only in certain situations. For example, a Soldier about to deploy may want a special POA to allow his family members to get ID cards. A principal about to permanently change station might grant a special POA, so the agent can ship his car.
-- Why should a Soldier get a POA?
Options are the primary impetus behind any properly created POA. They allow for more flexible financial planning between spouses.
A properly drafted POA gives the agent the necessary flexibility to act on behalf of the Soldier or when making large property purchases jointly. However, too many options can lead to disaster.
Too many Soldiers request a general POA without thinking about the possible repercussions of giving away easily abused power. For example, there are instances of spouses clearing out banking accounts just before filing for divorce.
Some businesses and institutions simply will not accept general POAs. For instance, a bank may require a more narrowly tailored special POA in order for an agent to sign for a joint mortgage or a car loan.
When Legal Assistance polled local Wahiawa businesses about their general POA procedures, only one of the six largest financial institutions said they would even consider accepting a general POA. That one institution emphasized that it would consider a general POA for a car loan only in rare circumstances of a deployed Soldier.
Local businesses are reluctant to approve a general POA. All seven automobile dealerships in Wahiawa expressed concern over a general POA, generally relying on first approval from the financial institutions initiating the loans before approving use of a general POA.
General POAs are rarely effective at car dealerships.
In summary, general POAs are risky and not widely accepted.
A special POA is the best way to go.
While a general POA may be less initial work, a special POA can be far superior. It's specific enough that the principal greatly reduces his risk.
If a spouse is limited to making car and utility payments under the name of the principal, the agent won't be allowed to sign new contracts or withdraw money from the principal's individual account like he or she could with a general POA.
Businesses are much more willing to accept a special versus a general POA.
When local businesses were asked about special POAs, all six financial institutions indicated that they've permitted use of special POAs in certain situations, especially when the special POA is very narrowly tailored for a specific purpose. Similarly, the local car dealerships were much more willing to accept special POAs. The dealerships are willing to cooperate because the financial institutions behind the loans are doing so.
-- Planning
Ultimately, if you're considering a power of attorney, keep these points in mind:
•Discuss the goals of your POA with an attorney.
•Keep it narrowly tailored by getting a special POA.
•Put a short time limit on it, like 1-2 years. It takes only a couple of minutes to renew it.
•Finally, never get a general POA unless it's absolutely necessary.
-- Appointments
Legal Assistance has weekday walk-in hours of 9:30 a.m.-4 p.m., Monday-Wednesday and Friday; and Thursdays, 1-4 p.m.
If you're seeking a power of attorney, make an appointment with Legal Assistance; call (808) 655-8607.
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