Power of attorney is a great legal instrument to safeguard the well-being and worldly possessions of those who cannot do so themselves.
Everyone, at some point, will need a power of attorney (POA). In POA, an entity (the agent) is entrusted with the authority to act on someone’s behalf. Agents can have varying degrees of authority over their business, finance, property, healthcare, and childcare. The main reason for seeking POA is physical incapacity. Whatever the type is, all power of attorney involves a number of things. Here in this article are some to keep in mind.
Understanding Power of Attorney
A POA gives your agent the authority to manage your affairs. It is a backup plan that can spring into action when you are physically incapable or need someone to look after your affairs. Different POA serves different purposes. In order to understand them a bit better, let’s look at their general aspects.
General Power of Attorney
The general POA gives the agent extensive authority to act on your behalf. This includes handling financial and business transactions, the sale of assets (such as stock), the investigation of claims, the filing of taxes, working with professionals, etc. To ensure someone can handle financial matters, estate plans often include general POA.
A general POA may be used if you intend to go out of the city and require someone to manage certain matters, or whether you’re physically or psychologically incapable of handling your own affairs. When the principal becomes incapacitated, revokes the POA, or passes away, any general POA arrangement is terminated.
Durable Power of Attorney
As a precautionary measure in the event of physical incapacity or inability to function normally due to illness or an accident, you can sign a durable POA. Here the POA can be general, special, or health-related, but the durability provision keeps the POA in effect. It is important to note that incompetence must be recognized by two licensed physicians or by a doctor.
Special Power of Attorney
A special or limited POA allows you to specify the exact duties (for example, handling business transactions, collecting debts, managing real estate, etc.) that your agent can perform. Consider giving this type of power when you are unable to handle those matters yourself should you become ill. Upon completion of the task or by the expiration of the time limit, this POA is automatically terminated.
Medical Power of Attorney
Medical or health care POA is a legal document that allows you to appoint a trusted friend or relative (the agent) to make medical decisions in the event that you are incapacitated. This enables the agent to consent to or prohibit any health care, medical care, treatment, or procedure. In any case, the agent may not make decisions regarding artificially supplied nutrition and hydration unless specifically instructed to do so.
There is a big difference between this and a living will (a document that defines how someone wants to be treated in the event of illness) or a “do not resuscitate” (DNR) order, which is a medical order that prevents CPR even if it could save the signatory’s life.
Adults over the age of eighteen should have a medical POA that names a trusted friend or relative to act on their behalf should they become temporarily or permanently incapacitated.
Choosing the Right Power of Attorney
The person you select to act on your behalf and to handle your financial and medical affairs has immense power and responsibility for you. During your lifetime, he or she is responsible for making sure your needs and wishes are met. So, when choosing a POA, give careful consideration.
Here are some tips to help you with the decision.
When choosing an agent, the most important question to ask yourself is: Who is someone trustworthy? Is it possible for you to trust that person to honor your wishes? You must be confident that he or she has your best interests at heart and won’t abuse the authority granted to them. Set up periodic updates from the agent to keep yourself informed or direct the agent to give your account to a third party if you can’t get it yourself. Agents are not liable for unknowingly doing something wrong and are not normally compensated.
If you are not sure about one particular person, you can engage multiple agents and specify if they are to act jointly or individually in making decisions to avoid any future conflict. Having a successor agent in case your principal agent is unable to fulfill his duties is also important.
Be sure the agent you choose has the skills needed to manage your finances or make medical decisions (for example, intelligence and business acumen).
Consider your family dynamics when choosing an agent. If your children or family members do not agree with each other, choose a neutral person outside the family. When family members are appointed jointly it can lead to friction and further strain family relationships.
Making Your Power of Attorney Legally Binding
POA is only valid if the original is signed and notarized. It’s critical to remember that you have to be mentally fit to sign it. You should make several certified copies of the document. Businesses and banks will not allow your agent to act on your behalf unless they receive a certified copy of your POA. A doctor’s certificate may also be required by the court.
Revoking a Power of Attorney
A POA may be revoked at any time. You can do so in writing by stating your name, that you are of sound mind, and that you wish to revoke it. Specify the date the original POA was commenced and the name of your agent. You should sign the document in front of a notary public and send it to your former agent, as well as any institutions or agencies that have a copy of the old POA. Don’t forget to mention that you used to have a POA if you do get a new one.
A POA is a great tool in the legal system for protecting property and finances when someone is ill, injured, or elderly. They can assist in taking care of business and life matters even when you cannot. It is important that you understand what they are before getting a POA. You can gain a better understanding of legal matters by attending lecture series or visiting various websites.