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What is a power of attorney?

A power of attorney is a document in which one person authorizes another to act on his/her behalf. The person executing the document is often called the “principal” and the authorized individual is called the “agent” or “attorney in fact”.

Are there different kinds of powers of attorney?

Yes. There are three basic forms of a power of attorney, i.e. durable, special, and general.

A special power of attorney is for a limited time or specific task such as to complete a real estate transaction when the principal is unavailable for closing. Once the task is completed or the time limit has expired, the special power of attorney has no authority.

A general power of attorney authorizes the agent to transact all business on behalf of the principal. Some instances where a general power of attorney might be used are as follows: between spouses when one spouse travels frequently and for extended periods of time; or between a parent and child when the parent is elderly and immobile.

Finally, a durable power of attorney allows the agent to act on behalf of the principal but only becomes effective when the principal becomes incompetent or unable to manage his/her affairs. Some durable powers of attorney will also authorize the agent to make medical decisions on behalf of the principal.

What are the drawbacks of a power of attorney?

A power of attorney allows one person to act on behalf of another. This should not be taken lightly. Some powers of attorney limit the types of actions or the time in which these actions can be taken. Some do not have these limits and no regulatory agency oversees the agent. Many times the principal is incompetent or incapacitated. An agent is someone you must choose carefully and wisely.

What are the benefits of a durable power of attorney?

A durable power of attorney is a cost-effective tool for managing a person’s affairs without having to establish a guardianship.

What is a living will?

A living will, often referred to as a Directive to Physicians, is a document that allows a competent adult to direct physicians to withhold or withdraw life sustaining procedures or other medical procedures in the event the signer should sustain an irreversible and incurable condition that will cause death within a reasonable period of time and where the use of life sustaining treatment would only prolong the process of dying.

The directive can also apply to persons living in a permanently unconscious condition who have been medically assessed as having no reasonable probability of recovery.

What other directions can be given in a living will?

You can direct the type of treatment you would like to receive, such as whether you should be given food and water intravenously, or whether you should be given pain medication that might hasten your death.

What if I change my mind about a living will?

A living will can be revoked by cancellation, destruction, written revocation or verbal directions. If the signer is capable of making healthcare decisions, a physician must ascertain whether the directive is still the desire of the patient before withholding or withdrawing life sustaining treatment.

Why do people enter into prenuptial agreements?

Prenuptial agreements are generally entered into when at least one of the parties has a substantial estate that he/she wishes to keep separate from the marital community. This estate could be a long time family business, an inheritance, or anticipated substantial future earnings.

I thought Washington was a community property state. How can you have separate property when you are married?

Separate property is generally that property you bring to the marriage. In addition, gifts and inheritances are considered separate property. Finally, parties are free to enter into agreements determining the character of property as separate or community.

If separate property stays separate property, why do I need a prenuptial agreement?

Separate property does not always stay separate. There are numerous factors that can change the character of property. An example of the character of property being changed by the actions of the parties is an inheritance being placed in a joint account where community funds are also deposited and withdrawn, and it becomes impossible to determine community funds versus separate funds. In that event all funds may be deemed to be community funds. Another example is the marital community investing substantial funds remodeling a home that was owned by one of the parties prior to the marriage. In that instance the community may have a lien against that property. There are numerous circumstances where separate funds may be partially or completely characterized as community property as a result of the actions of the parties. A prenuptial agreement will explicitly set forth those items that will retain their separate character.

I have heard stories of prenuptial agreements being determined invalid. How do I make sure an agreement I enter into is valid?

The preeminent case on validity of prenuptial agreements is In re the Marriage of Foran, 67 Wn.App. 242, 834 P.2d 1081, (Wash.App. Div. 1 1992). In Foran, supra, the court found:

“The validity of a prenuptial agreement is evaluated by means of a 2-prong analysis: First, the court must decide whether the agreement provides a fair and reasonable provision for the party not seeking enforcement of the agreement. If the court makes this finding, then the analysis ends and the agreement may be validated…. The second prong of this analysis involves two tests … (1) whether full disclosure has been made by [the parties] of the amount, character and value of the property involved, and (2) whether the agreement was entered into fully and voluntarily on independent advice and with full knowledge by [both spouses of their] rights. In re Marriage of Matson, 107 Wash.2d 479, 482-83, 730 P.2d 668 (1986).

What this means is that the court must first determine if the contract is fair and reasonable. It does this by deciding if each party is fairly compensated for the resources brought to the marriage and the time and resources contributed to the marriage. If so, the court will determine the contract valid and there will be no further review.

However, if the court feels the contract is not fair, then it must determine two additional matters set forth above.

Determining if both parties disclosed assets and debts is a fairly simple process as a list of debts and assets is usually included in each agreement. However, determining if both parties entered into the agreement with full knowledge of their rights is a more difficult finding. Usually the courts will look to make sure both parties were represented by independent counsel. After all, how can a person have full knowledge of his/her rights unless they know what their rights are. Additionally, the courts will make sure that both parties were given sufficient time to review the contract. The infamous stories of being handed a prenuptial agreement to sign in the limousine on the way to the wedding with the threat of “sign it, or no marriage” will almost always result in an invalid contract.
What happens if a prenuptial agreement is declared invalid?
If the parties are going through a dissolution proceeding, the courts are free to award property in a fair and equitable manner without regard to terms of the contract.