If you want someone to be able to deposit your checks at your bank, file your taxes, or even sell or mortgage your home, you can create a handy document called a power of attorney. A POA is a simple document that grants specific powers to someone you trust—called an "agent" in Colorado (and an "attorney-in-fact" in some states)—to handle certain matters for you.
You can make several different types of POAs in Colorado. In particular, many estate plans include two POAs:
In most estate plans, these POAs are what are known as "durable" POAs, which means that they retain their effectiveness even after you're incapacitated. It's a good idea for most people to create these two documents, as they help plan for the unexpected.
To learn about other types of POAs, including non-durable (limited) and springing POAs, see What Is a Power of Attorney. Below, learn how to create a durable financial POA that is valid in Colorado.
For your POA to be valid in Colorado, it must meet certain requirements.
The person making a power of attorney must be of sound mind. While the exact contours of this mental capacity requirement are open to interpretation by Colorado courts, and there have not been many cases on this subject, Colorado appears to require "contractual capacity"—the ability to enter into contracts and conduct business. If you're helping someone make a POA, you should make sure that they can still handle their own affairs.
To make a POA in Colorado, you must sign the POA in the presence a notary public.
Colorado offers a statutory form (a form drafted by the state legislature) with blanks that you can fill out to create your POA. However, statutory forms are often full of legalese, and it's not always apparent how to fill them out. For a more user-friendly experience, you can try a software program like WillMaker, which guides you through a series of questions to arrive at a POA that meets your specific aims and is valid in your state. You can also hire a Colorado lawyer to create a POA for you. Many lawyers will include durable POAs as part of a more comprehensive estate plan alongside a will or living trust.
Whatever method you choose, the process of making the POA will include either granting your agent comprehensive powers or initialing, from a list, each specific power you want your agent to have. For example, you might choose to grant your agent the power to act for you with respect to these subject areas:
In Colorado, if your POA was made on or after January 1, 2010, it is a durable POA unless it explicitly states that it terminates when you become incapacitated. (Prior to 2010, the opposite was true; POAs were non-durable by default.)
As mentioned above, you can't simply sign the document and call it a day. In Colorado, you must notarize the POA.
Once you have completed the POA, store the original in a safe place that your loved ones can easily access, and let them know where to find it. (It won't do much good locked away in a safe that no one can get into.) If you become incapacitated, your agent will need the original POA to act on your behalf.
You should also give a copy of the power of attorney to your agent so that your agent is familiar with the contents of the document.
If you initialed "real property," giving your agent the power to conduct transactions with real estate, you should also file a copy of your POA in the land records office (called the clerk and recorder's office in Colorado) in the county where you own real estate. This will allow the clerk and recorder's office to recognize your agent's authority if your agent ever needs to sell, mortgage, or transfer real estate for you.
You can also give copies of your durable financial POA to banks or other institutions that your agent might need to deal with in the future. This step might eliminate some hassles for your agent if your agent ever needs to use the POA. However, it's not necessary.
Legally speaking, you can name any competent adult to serve as your agent. But you'll want to take into account certain practical considerations, such as the person's trustworthiness and geographical location. For more on choosing agents, see What Is a Power of Attorney.
Colorado allows you to appoint co-agents who are authorized to act at the same time, but it's usually advisable to stick to just one agent to minimize potential conflicts. However, naming a "successor" agent—an alternate who will become your agent if your first choice is unavailable for any reason—is always a good idea, as it creates a backup plan.
Your POA is effective immediately unless it explicitly states that it takes effect at a future date.
It's possible to create a condition that must be satisfied before the POA becomes effective—such as a doctor declaring that you are incapacitated—but there are many reasons why this type of "springing" power of attorney is not usually advised.
Any power of attorney automatically ends at your death. A durable POA also ends if:
For more on Colorado estate planning issues, see our section on Colorado Estate Planning.