CEA CEA Powers of Attorney & Advance Directives

Question 1

A 'durable' power of attorney differs from a standard power of attorney in that it:

Accepted Answer

Remains effective if the principal becomes incapacitated

Answer

Expires automatically after five years

Answer

Can only be used for real estate transactions

Answer

Requires annual renewal by a notary

Question 2

A 'springing' power of attorney becomes effective only when:

Accepted Answer

A triggering event, such as the principal's incapacity, occurs

Answer

The principal reaches a certain age

Answer

The agent files it with the county recorder

Answer

The principal's physician approves it

Question 3

Which document allows a person to name someone to make healthcare decisions on their behalf if they are unable to do so?

Accepted Answer

Healthcare proxy / healthcare power of attorney

Answer

Living will

Answer

Durable financial power of attorney

Answer

Revocable living trust

Question 4

What is the primary purpose of a living will (advance directive)?

Accepted Answer

To document the principal's wishes regarding life-sustaining treatment

Answer

To distribute property without probate

Answer

To authorize an agent to manage financial accounts

Answer

To establish a testamentary trust for minor children

Question 5

Which type of power of attorney is typically used for a specific transaction and terminates once that transaction is complete?

Accepted Answer

Limited (special) power of attorney

Answer

Durable power of attorney

Answer

General power of attorney

Answer

Springing power of attorney

Question 6

An agent under a financial power of attorney has which primary fiduciary duty?

Accepted Answer

To act in the best interest of the principal

Answer

To invest the principal's assets for the agent's benefit

Answer

To distribute assets to heirs before the principal's death

Answer

To report investment decisions to the state