As a lawyer who practices in both the areas of domestic relations and estate planning, I can’t help but think about the interplay between the two.
Recently, I had a potential client who came into the office wanting to divorce her husband, but not wanting to do without his money. She relayed to me that, several years before she and her husband had started having marital problems, her husband had executed a Durable General Power of Attorney in favor of her (i.e., her husband had executed a document which gave her the almost unfettered ability to transact on his finances). This potential client wanted to know if she could go down to the local bank and use the Power of Attorney to withdraw all of her husband’s money (which was held in accounts that did not have her name on them) and what implications, if any, there could be if she later chose to file for divorce.
While this woman was not yet a party to a divorce action, her situation gives rise to an important point relating to the intersection between domestic relations and estate planning: you must always trust the person whom you have named as your agent under a Durable General Power of Attorney and, if and when that trust ends, you need to remember to revoke your Power of Attorney. Revocation may be as simple as tearing up the Power of Attorney.
Nowhere is it more important for a person to revoke his or her Durable General Power of Attorney than in the context of a separation. Section 26-81 of the Code of Virginia provides that an agent’s authority under a Power of Attorney terminates when an action for divorce or annulment of the agent’s marriage to the principal (i.e., the person who executed the Power of Attorney) is filed or in the parties’ legal separation, but it does notprotect two parties before a Settlement Agreement is signed. As a result, if your family circumstances are bad enough that you are visiting a lawyer toobtain information and guidanceabout a separation or divorce, you may want tostrongly consider revoking your Power of Attorney as soon as possible to avoid any further difficulties.