A power of attorney (POA) is a vital document that everyone might need at some point in their lives. It grants legal authority to another person or or
A power of attorney (POA) is a vital document that everyone might need at some point in their lives. It grants legal authority to another person or organization to act on your behalf.
The appointed agent helps you manage financial, medical, or property matters. When writing a POA, check your state requirements before gathering witnesses, naming the parties, and detailing the powers granted. The POA is less contestable when notarized, so you should also consider enlisting the help of professionals like Superior Notary Services to make your documents ironclad with minimal fuss.
Like many legal proceedings, powers of attorney include more than what meets the eye. Here are eight things you need to know before you draft your agreement.
There are different types of powers of attorney
Unknown to many people, powers of attorney come in different variations. In most cases, you’ll encounter the following POAs:
A durable power of attorney remains intact even if you become incapacitated. The opposite happens with a non-durable POA. The durable POA will help loved ones manage your medical and financial affairs if you can’t make decisions for yourself.
A springing POA is a durable POA that only comes into play after certain conditions have been met. For example, your springing POA might only be valid if you’re rendered incompetent, and so forth.
Limited POAs grant power to your agent for a limited purpose. It could be a one-time decision on healthcare, finance, or property.
Lastly, with a general POA, your agent acts on all matters as allowed by law.
The different powers of attorney all have their uses, so you should consult your attorney to determine the best fit for your needs.
When to grant power of attorney
Anyone who wishes to delegate their decision-making to another party should use a power of authority. A POA might be necessary if you have a minor injury, illness or if you’re traveling.
Like a will, POAs should be part of your estate planning documents. Don’t wait to be incapacitated before looking for an agent to act on your behalf. After you’re rendered incompetent or incapacitated, it’s often too late to make your wishes known.
They become irrelevant at death
The power of authority becomes useless when you die. Your agent loses all control and cannot act on your behalf once you pass on.
A will dictates what happens to the decedent’s assets. If a will is absent, the deceased’s property might go through probate.
Powers of attorneys are revocable
A mentally competent principal can rescind a POA. The revocation or amendment can occur at any time, even before the agreed period elapses.
You have to notify the attorney-in-fact of such an action. You should also inform relevant third parties, like banks, about the rescindment.
They can be abused
An agent should make decisions that are in the best interest of the power donor. Regrettably, some agents fail to carry out their fiduciary duties.
Powers of attorney don’t give an agent the right to act whenever they want. Rogue agents can swap names on bank accounts, change the beneficiary designation, and perform other activities that might hurt your financial position. So, be on the lookout for untrustworthy agents.
If the worst happens, you can hire competent lawyers to take legal recourse against agents who abuse powers of authority.
Legally incompetent people cannot sign a power of authority
A principal should be of sound mind when signing a POA. If you’re legally incapacitated, you cannot appoint an agent to act on your behalf.
If you’re a caregiver, talk to your parents about giving power of authority. Your parents need to make such a decision before they become incapacitated.
You might consider conservatorship if your loved one lacks the legal capacity to grant power of authority.
They don’t take away your power to act
A power of authority doesn’t strip off your ability to make individual decisions. When you write a POA, you’re only delegating your power to act to a third party.
As long as you’re competent, you can make critical healthcare, finances, and property decisions. Your agent might take over if you become incapacitated.
With that said, this power functions differently from a conservatorship, wherein a court appoints a third party to act on your behalf.
You can name co-agents or joint agents
A power of attorney can have multiple agents. Having more agents provides some accountability to the POA. An alternate agent can also act on your behalf if your primary agent dies.
Keep in mind, conflicts and slow decision-making do happen when multiple agents are involved. Such disputes can significantly hamper relationships between siblings, so choose carefully when naming numerous agents on your behalf.
No one wants to imagine a world wherein they may not be able to make decisions anymore, but it could happen to anyone. That’s why it’s vital to appoint a power of attorney to act on your behalf in case disaster strikes.