Power of Attorney
Updated: Apr 3, 2020
The following is an article “Power of Attorney”
by Marc Primo.
Let's get started with a simple definition. A power of attorney, or a POA, is a document that allows competent adults to choose someone to represent them legally and financially on their behalf.
All powers of attorney must meet different state-specific standards to be legally valid.
As long as the state specifications are followed you are allowed a great deal of creativity with these tools.
He who creates a power of attorney is known as a principal. To be a principal you must: be an adult, and of sound mind.
“Agents,” or “attorneys-in-fact” are the representatives chosen by the principal. They also must be capable adults and sound of mind.
Power of Attorney (POA) Types
There are two basic types of POA:
A general power of attorney involves a lot of trust. This document can render an agent capable of making any and all decisions you would be able to. A general power of attorney is used in situations where an agent would handle all of your personal and financial business in order to protect your interests while you are incapacitated.
Any other power of attorney with described limits is a limited power of attorney. They can be limited to specific tasks and time frames.
As the name implies a durable POA can represent the principal after he/she becomes incapacitated or loses the ability to choose for themselves. The durable POA cannot be revoked while the principal remains in this status.
Let's say you gave out a Non-durable POA to a realtor to make a deal on your behalf. If you were to become incapacitated the non-durable POA is revoked and the realtor would no longer have the power to make the deal.
An Immediate or Standing POA is in action the moment you sign it.
A springing POA only comes into action if a previously stated event takes place. You might create a springing durable POA making your wife or trusted other the agent in the case you become incapacitated. Only when and while incapacitated can the agent make choices for you.
A POA for finances is usually used by accountants and stock brokers. It gives your agent the ability to manage the financial affairs you specify. Like, buy and sell stock, or file or pay your taxes for you.
A POA for healthcare – as a principal you are giving your agent the right to make medical decisions for you. The person who will ultimately make decisions with the doctors about your choices in treatment.
Powers of attorney (POA) have to be one of the most useful legal documents available.
But why would you need one?
-If you travel a lot for work wouldn't you want to make sure your wife can manage your finances while you are away?
-Want to multitask? Do you want to buy or sell a property but cannot be present to sign documents?
-Cut the red tape for your family if you were to be incapacitated.
-As a parent, you might want to take a vacation and leave the kids with responsible adults.
There a can be a myriad of reasons to use such a legal tool.
Delegating your legal and financial power to another is a hard choice but when done right can be the best decision for all involved.