What is a Power of Attorney in Wisconsin?
Wisconsin Power of Attorneys are legal documents that allow you (the Principal), to authorize another person (the Agent or Attorney-in-Fact) to act on your behalf regarding either financial or medical decisions. Each situation will require a different type of Power of Attorney, as each type is tailored for a specific area of importance for your needs.
The Power of Attorney is an extremely important tool in the planning of your future and should not be taken lightly. The scope of your Power of Attorney can range anywhere from a limited Power of Attorney (which may give the Agent very little authority) to a general Power of Attorney (which may give the Agent almost full authority to make decisions on your behalf).
Having an estate planning attorney draft these documents is imperative for ensuring your documents are written with the proper legalities and are as broad or narrow as you need them to be to accomplish your goals. Trying to get this drafted yourself by blank forms you find on the internet will leave you at risk of paying an attorney after the fact to fix the issues that arise from improperly drafted Powers of Attorney.
Power of Attorneys are extremely important estate planning documents. It would surprise even the most novice estate planner to see the power the Agent holds through these documents. As far as financial matters, the Agent could sell your home and bank accounts , liquidate stocks and retirements accounts, obtain credit/debit cards, borrow money, and/or go into your vault in your safe deposit box with no accountability to anyone regarding how they spent that money. On the medical side it goes just as deep: the Agent can admit you to and discharge you from a nursing home and/or hospital, choose your physicians, and even decide to have you euthanized as long as your wishes regarding this decision is followed.
Realistically most people would not trust their family members to do most of these things let alone a random stranger. Knowing this, how could you trust the Power of Attorney that is drafted without your estate planning attorney reviewing your situation and customizing the document for YOU?
In summary, a Power of Attorney is an important estate planning tool that should be left to the professionals to draft. Real estate, insurance, and banking companies, along with all other institutions should not be trusted to treat your Power of Attorney the way you want it to be treated. They will most likely not do the proper due diligence required to ensure the Power of Attorney you hand to them is drafted properly. They will not walk you through all the details a professional estate planning attorney will do to protect your family. Do not take for granted this critical piece of your overall estate plan.
Different Types of Wisconsin Power of Attorney
Three main types of power of attorney (POA) exist in Wisconsin: durable, general, and limited. These are sometimes referred to by the name of the authority they grant, such as financial POA, legal POA, and health care POA. Although the names are not always consistent and their application may vary by state, we will look at how these types of POA operate specifically in Wisconsin.
The Durable Power of Attorney
The durable POA is often used to grant extra authority in instances where you want to have someone else handle your financial or legal matters. This is also the most commonly used type of POA. For example, a durable POA may be used to allow someone to sell property or cash in insurance policies for you. Durable POAs are often written to take effect immediately but they can also be made for particular circumstances, such as if you lose the ability to care for your own needs, or if you become disabled or incapacitated.
General Power of Attorney
Unlike durable ones, general POAs are not useful in enduring periods of incapacity. A general POA is the type most often used only to grant general legal authority to handle legal and financial matters. A general POA becomes invalid if you become incapacitated. You cannot make a general POA effective after that happens. Even when not in place for incapacity, it has limited powers. However, a general POA can be limited to certain areas or functions. It still may be useful for cases when a person does not want anyone to act in their place during periods of incapacity, but a regular or durable POA should then be in effect for the other time periods.
Limited Power of Attorney
A limited POA is just as the name implies — it is often written to grant limited power to another for a specific purpose. It is restricted in the tasks that the aforementioned person is allowed to do on your behalf, which you will also define and specific in the POA. Generally, limited POAs provide the least flexibility for an agent, so if there is an instance that requires flexibility outside of what is included in the POA, you will have to make a new one to allow your agent to perform additional actions on your behalf.
Health Care Power of Attorney
But we must not forget a health care POA, which allows a person to act on your behalf to make health care decisions and to consent to or refuse medical treatments for you. This type of POA generally stays in effect if you become incapacitated. It must be signed if you wish to have someone else to make health care decisions for you in the event you are incapable. If you do not have a health care POA in effect when you can no longer make decisions on your own health care, your loved ones will have to seek the court system to make decisions for you if they decide they must act.
Wisconsin Power of Attorney Legal Requirements
In Wisconsin, establishing a valid power of attorney (POA) requires adherence to specific legal requirements. The document must be executed by the "principal" (the person granting the authority), who is 18 years of age and mentally competent. A POA in Wisconsin authorizing a third party to manage your financial affairs or medical decisions (indicating the comprehensive nature of POAs in the state) necessitates the inclusion of an agent (the person designated to act on behalf of the principal). Legal regulations in Wisconsin do not require the same degree of formality as other documents, like wills, for a POA to be considered legally binding.
While typically no witnesses are required for signing a POA in Wisconsin, they would need to be present if these criteria are met:
Witnesses for a Health Care POA should have no financial stake in the principal’s medical care or benefit from the execution of the document. They are also restricted in their ability to be an agent, related to the principal, or otherwise involved in providing medical services to the principal at the time of the signing.
A POA in Wisconsin does require notarization—although scant other substantive requirements are imposed. Notaries verify the identities of signers, help them understand the agreement, and confirm they act freely and voluntarily in executing the document. In many cases, GPA (General Practice Attorney) services don’t require notarization, and individuals with degrees in certain fields related to psychology, psychiatry, social work, counseling, and theology, or who serve as guardians ad litem, are exempt from notarization requirements.
Guidelines to Drafting a Power of Attorney in Wisconsin
The first step in how to draft a power of attorney in Wisconsin is to make a decision on what kind you need. As a refresher, a Power of Attorney (POA) document can either be of the financial type or the health care persuasion. If you are ever in the unfortunate position where you can no longer manage your own property and financial affairs, the durable power of attorney for finances would be needed. Alternatively, if you are unable to communicate your wishes to your doctor about your health conditions or medical treatment, a durable power of attorney for health care would be necessary. Fortunately, the power of attorney in Wisconsin is a statutory form. This means there are certain requirements for the POA to be valid, including having a witness and/or notary sign the document. You can find one of these forms at Wisconsin Legislative Documents. The financial documents are good all throughout the state, while the health care documents have some different variations between different counties.
The next step in how to draft a power of attorney in Wisconsin is selecting someone you trust to be your agent (or multiple agents.) Selecting the right individual or individuals to hold your power of attorney is an immensely important decision. You should ensure the individual is trustworthy and competent enough to act on your behalf should any problem arise. In addition, they should be aware of your meetings and be open and willing to communicate with you about your financial or health care decisions. In other words, only grant power of attorney to those you trust, and further, have confidence in their decision making abilities. After selecting the right individual(s), they will need to sign the document. If a witness &/or notary is required, that person would do so at this time.
Next, the document is ready to go. You can do whatever you would like with it, such as give it a close review, and ensure that it is filled out properly. Be honest with your representative, and provide them with any information they may require to successfully carry out the duties of power of attorney.
Once the power of attorney is completed, the job is only half done. You should let your friends and family know about the POA, as well as your provider of any financial institution, bank, or health care provider. This is essential, as each establishment will have a different protocol for receiving power of attorney documents, and may request a doctor’s approval of their capacity to act as POA, a copy of the original document, or even a witness present. Make sure you consult with them to understand what is exactly needed in order for your agent to fulfill their role accordingly.
How to Revoke Wisconsin Power of Attorney
The first thing you should know as an agent is that you have the power to revoke a power of attorney. In other words, you can create an instrument that will terminate the role of your agent. Such a power will create a vacancy in the position that you can use to appoint a successor agent. Likewise, a principal can terminate the agency at will. There is no requirement for cause in Wisconsin, unlike some other states. By declaring in writing that the power of attorney is no longer in effect, the agency relationship can be ended.
After the document is executed, give copies to the agent and the institution or person(s) with whom the agent was to do business on your behalf. The new agent must give notice to the bank or other institution that the original agent has been terminated. Note: if the principal is incompetent, the agent might have the authority to decline the role as agent . Even in that scenario, the agent would not have the power to appoint a successor and only that power would be given to the principal.
The revocation will be effective immediately or on the date specified in the document. No third parties’ rights are affected by the termination other than to the extent that the agent’s authority is no longer in effect.
If a statutory durable power of attorney exists, a copy of the revocation should also be given to the principal’s physician and to the health care providers who have provided health care services to the principal within the past six months.
With respect to your financial accounts, you may not need to use the instrument and might instead be able to simply go into your banks and request that the institution terminate your original agent’s authorization. Ask your bank which is more convenient.
Mistakes to Prevent When Doing Wisconsin Power of Attorney
Some common mistakes to avoid when it comes to Wisconsin power of attorneys are as follows:
Refusing to act: When an Agent refuses to act for a Principal, the Agent may become personally liable for losses that are incurred by the Principal. So if the Agent is not going to act, they should resign in writing.
Failing to follow the wishes of the Principal: A power of attorney is a document that gives power to another person to act on your behalf. The Agent has a fiduciary duty to the Principal. This means that the Agent should always act according to the wishes of the Principal.
Signing after the Principal has died: After a Principal dies, the power of attorney is no longer in effect. This means that the Agent and the principal cannot legally have any transactions after the Principal’s death.
Conflict of interest: The Principal must appoint someone who is loyal to them. Competent individuals should be appointed to avoid conflicts of interest.
PTSD: PTSD can affect an Agent’s ability to act on behalf of the Principal. If the Agent is incapable of making decisions, he or she should resign.
Financial abuse: Money and power of attorneys are often used in an unethical manner. Financial abuse occurs when the Agent uses the funds of the Principal for his or her own personal use.
Wisconsin Power of Attorney FAQs
Below is a list of some of the most frequently asked questions about power of attorney in Wisconsin.
Can a power of attorney be revoked?
Yes, even if your agent doesn’t have possession of the actual document you can still revoke the power of attorney.
If you are competent, you can do so by preparing a written revocation or destroying the original document.
If you do not have the original document or are physically unable to revoke the power of attorney, you can send a written notice of revocation to your agent with a copy to your financial institution(s), doctors, and the court if necessary .
Can I make a verbal power of attorney in Wisconsin?
No. A power of attorney must be in writing and signed.
What happens if my agent abuses his/her power?
Under the revised Wisconsin Power of Attorney Act, damages from misconduct by an agent may result in surcharges or even liability for bad faith. If the agent does abuse their position, the principal can revoke the POA and ask the court to appoint a successor agent.
The successor agent then takes over the relationship and can seek reimbursement from the first agent for any harm caused.