knowledge topics
Foundations of Powers of Attorney
KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals
- Define a power of attorney.†
- Define types of powers of attorney.
- Explain rights and limitations associated with each type of power of attorney.
- Identify that power of attorney legislation may differ by jurisdiction.
- Identify that a power of attorney may only be valid in the jurisdiction in which it is created.
- Identify that the creation of a new power of attorney document may revoke a past power of attorney document, unless explicitly stated otherwise in the new document.
- Explain risks associated with failing to have current powers of attorney in place.
- Explain benefits and risks of the following approaches to drafting a power of attorney document.
- Self-drafting
- Drafting by a competent legal professional
- Define parties to a power of attorney.
- Donor / grantor††
- Donnee / agent / proxy / attorney†††
- Identify requirements for the grantor to give power to an attorney, such as:
- Age of majority
- Mentally competent
- Define types of attorneys that may exist.
- Sole attorney
- Co-attorney
- Alternate/subsequent attorney
- Identify requirements for an individual to act as an attorney, such as:
- Age of majority
- Mentally competent
- Identify that in some jurisdictions an undischarged bankrupt cannot be appointed as, or carry on as, an attorney.
- Explain benefits and risks of naming multiple attorneys.
- Explain how many attorneys must agree on a decision.
- When a designation within a power of attorney document states that they may act jointly and severally
- Where no designation within a power of attorney document has been made
- Identify individuals who are generally prohibited from acting as a witness to a power of attorney document, such as:
- Spouse
- Child
- Parent
- Individual named as the attorney in the power of attorney document
- Employee of the donor
- Agent of the grantor
- Define types of decision-making powers that may be given to an attorney.
- Property
- Personal and/or health care
† Power of attorney is being used generically to denote any document for which an individual grants decision making authority and the ability to act on their behalf to another.
†† Grantor denotes the individual that has given the power to act on their behalf to another individual.
††† Attorney denotes the individual that has been given the power to act on behalf of another. This title may have different names in different jurisdictions.
Glossary of Verbs (mouse over to see definition)
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Define
To state exactly the meaning of
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Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
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Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
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Compare
To note the similarities and differences between two or more things
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Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
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Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a judgement through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally
Read more about the Taxonomy used in the FP-BoK
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