You’re probably used to taking care of your own finances, but someday you might need help handling financial matters. Diseases like Alzheimer’s or dementia can interfere with your mental capacity, causing you to rely on someone else to take care of your bank accounts, investments and bills. Or travel may take you out of town during times when you need someone else to transact your business locally. For these types of situations, Louisiana law allows you to give authority over your finances to another person through a power of attorney.
Durable Vs. Non-Durable
In Louisiana, powers of attorney are called mandates or procurations. A power of attorney is a document that gives your agent, called a mandatary, certain powers such as the ability to access your bank accounts, withdraw funds and sell your property. In Louisiana, your power of attorney is automatically durable, meaning it will not expire if your become incapacitated. If you do not want your agent’s authority to continue after you become incapacitated, you must specify that in your power of attorney, thereby creating a nondurable power of attorney. If your goal is to provide authority for your agent only when you are incapacitated, you can create a “springing” power of attorney, called a conditional power of attorney in Louisiana. This document does not give your agent any authority now. Instead, your agent’s power exists only during your incapacity.
Whether durable or nondurable, powers of attorney for finances can cover a wide variety of financial transactions. For example, you can use a power of attorney to let someone sell your vehicle for you or access one of your bank accounts. You can also give someone much broader authority through a general power of attorney. Instead of listing specific things your agent can do, a general power of attorney grants authority over broad categories. For example, a general power of attorney could give your agent authority to access all of your bank and investment accounts instead of just one.
To sign a valid power of attorney, you must be of sound mind, meaning you understand what you are doing by signing the power of attorney. Thus, you must create your power of attorney before you become incapacitated. Once you are no longer of sound mind, you cannot create a power of attorney, so your loved ones must pursue other legal options to help you manage your finances. Your power of attorney must be in writing and you must sign it in front of two witnesses and a notary. Your agent cannot act as a witness.
Your agent’s authority terminates automatically when you die, but you can change or revoke your power of authority at any time while you are alive and mentally competent. To change your agent’s authority, you must destroy the older power of attorney and create a new power of attorney listing the agent’s new powers. To revoke a durable power of attorney, simply destroy the document. Since others may not know about the revocation, especially if they already have copies of your power of attorney, you may wish to inform your banks or other institutions that you have revoked the previous document.