A power of attorney can also provide you with the comfort of knowing that someone else is in control of your affairs while you are away or sick.
A power of attorney (POA) can be required for a variety of reasons. For example, whether your health is deteriorating or if you want to travel for an extended period, designating a trustworthy person as your power of attorney can take decisions on your behalf and make necessary changes.
What is a power of attorney (POA)?
A power of attorney (POA) is a legal document that authorizes a person, referred to as the agent or attorney-in-fact, to act on behalf of another, referred to as the principal.
Depending on the terms of the POA, the agent can have restricted or full power to make legal decisions about the principal’s property, money, or healthcare.
There are four types of power of attorney, which are:
- General power of attorney, also known as a limited power of attorney
- Springing power of attorney, which only applies to certain occurrences
- A durable power of attorney, which lasts a lifetime until revoked
- A medical power of attorney, also known as a durable power of attorney for healthcare
The primary aim of this agreement is to guarantee that the principal’s finances and health are looked after by someone they trust if they become incompetent and unable to make their own choices.
Most people consider a power of attorney with people suffering from dementia. The necessity for one can be as simple as a principle requiring an agent to execute a contract on their behalf while they are away (on an extended vacation or out of the country). So, how do you appoint someone as your agent? Let’s find out!
You might be wondering how you appoint someone as your agent or how to remove power of attorney from someone? Let’s find out.
How to Give a Power of Attorney
It is essential to choose an agent that is both trustworthy and competent. This individual will have the same legal power as you, which means that any errors made by your agent can be challenging to correct. Even worse, depending on the scope of the authority you give, there can be a risk of self-dealing. For example, an agent can access your bank accounts, have the authority to transfer money, and the authority to sell your property.
Any competent adult, even a professional such as a lawyer, accountant, or banker, can be your agent. However, your agent could also be a family member, such as your spouse, adult child, or relative. You can avoid paying professional fees and keep confidential information about your money and other personal matters in the family by selecting a family member as your agent.
Suppose you do not have someone you trust to serve as your attorney in your personal life. In that case, you can hire a professional fiduciary. This is just a hired professional who will carry out your desires if you cannot do it yourself. Additionally, a compensated fiduciary is often appointed with a restricted power of attorney to solely manage your financial assets. Once you have chosen your agent, you will want them to meet with your lawyer to ensure everyone is on the same page.
You may want to consult a lawyer to get acquainted with the procedure before making any choices. Of course, whichever option you choose is entirely up to you. In any case, your lawyer will be familiar with all of the minute intricacies involved in preparing a power of attorney form. Additionally, they will provide you with expert guidance if you are having difficulty making a choice.
Perhaps you need one person to handle all financial decisions while another controls healthcare decisions. Alternatively, you may have a single person in mind to manage all aspects of your life.
Is your agent tasked with a particular job, such as signing a contract on your behalf, or are they in control of all financial and medical choices until your death? It is critical to flesh out the specifics to avoid misunderstanding the agent’s function once the agreement is signed.
Once you have decided who will serve as your agent and what responsibilities they will have, it is time to draft the power of attorney paperwork. It is a straightforward template, so you will not have to worry about missing anything. Include your principal’s name and the attorney-in-fact. Each form pre-defines the tasks that the agent must do. You just simply tick the boxes next to the tasks. You then have the option of granting your agent some specific duties.
In some states, the form must be submitted to the county clerk who has validated the document. Before signing the document, be careful to verify your state’s regulations and consult with a lawyer.
A POA can designate several agents, each having the power to act independently or collectively. For example, having two children independently authorized to handle things can be advantageous if one becomes unavailable for whatever reason while needing two to agree on significant activities such as selling a home can ensure family consensus on meaningful choices.
Revoking Power of Attorney
Certain circumstances, even if they are unintentional, can revoke a power of attorney.
In many states, divorce nullifies the power of attorney if you designated your spouse as an agent. Thus, even a legal separation can result in the termination of your spouse’s authority to act on your behalf.
While your death automatically revokes a power of attorney, you can revoke it yourself at any moment, provided you are of sound mind.
Suppose you wish to provide someone temporary power of attorney, for example. In that case, while you are out of the country or on vacation, you can specify this in the document by referencing a particular date, time, or event when the POA will expire.
A power of attorney is a legally enforceable document, and it is essential to understand your choices thoroughly. Whether an agent is chosen to manage the principal’s money, medical choices, or both, the agreement will detail the agent’s responsibilities and expectations. Keep in mind that each POA agreement is unique to the requirements and wishes of the principal for the future. However, with hiring a lawyer, you must ask some important questions like if they have any previous experiences or how they deal with specific situations.
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