A power of attorney is a legal document that allows a person (the principal) to appoint another attorney as their representative (attorney-in-fact). This document can manage money, make medical decisions, and carry out legal transactions. We will discuss the basics of power of attorney, how to create one, and things to consider before giving someone else this authority.
Types Of Power Of Attorney
There are various types of power of attorney, and some of the most popular types are the following:
- General Power Of Attorney
A general power of attorney gives the agent broad authority to act in the principal’s place in various situations, such as managing money and handling legal business. The principal can still make decisions and take action on their behalf. Still, the agent has the authority to represent and act on the person’s behalf in almost any situation.
It is important to remember that, unless otherwise stated, a general power of attorney ends when the principal becomes incapable. If the principal becomes incapable, a durable power of attorney is required.
- Limited Power Of Attorney
In certain circumstances, such as the sale of a property or the signing of a contract, a limited power of attorney grants the agent the authority to act on behalf of the principal. This power of attorney is usually used when the principal needs help with a single task but only needs administration of their entire financial or legal affairs.
A limited power of attorney is time-limited, which means it only lasts as long as it takes to finish the assigned duty.
- Durable Power Of Attorney
A durable power of attorney is still in effect even if the principal cannot make decisions. This power of attorney is frequently used to handle financial and medical issues. Even if the principal cannot act independently, the agent has the authority to make decisions and take action on their behalf.
It is important to remember that a durable power of attorney must say so when creating the document. If it isn’t, the principal may be incapable of canceling it.
- Springing Power Of Attorney
A springing power of attorney only takes effect when a particular event occurs, like the principal’s incapacity. Making medical decisions frequently requires the use of this type of attorney power. As mentioned earlier, the agent lacks the authority to act on behalf of the principal before the event.
Due to the potential difficulty of proving the event that triggers it, it is important to note that a springing power of attorney may be more challenging than other types of power of attorney. Also, it might be more difficult for the agent to act quickly in an emergency.
With the help of estate planning lawyers, you can prepare for your long-term care needs. One means of accomplishing this is by establishing a power of attorney. This legal document permits someone to act on your behalf in the event of your incapacitation.
Lawyers with estate planning experience can also help you make a living will which expresses your wishes for receiving end-of-life care. Even if you cannot make these decisions yourself, you can ensure you receive the medical care you desire by planning ahead for your long-term care needs.
You can make arrangements for the disposition of your digital assets with the help of lawyers with experience in estate planning. Social media, email, and online bank accounts are digital assets. Estate planning lawyers can help you set up a plan to transfer your digital assets after your death to ensure your loved ones can access them and care for them how you intended.
Creating A Power Of Attorney
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To create a power of attorney, the principal must be of sound mind and be able to make legal decisions. To create a power of attorney, follow these simple steps:
- Choose An Agent
The principal must choose a trustworthy person to act as their agent. The agent must be reliable and able to fulfill the duties of a power of attorney.
- Select The Type Of Power Of Attorney
The principal must select a power of attorney that best suits their needs.
- Draft The Document
The power of attorney document must include the following:
- The names of the principal and agent.
- The type of power of attorney.
- The specific powers granted to the agent.
- Sign And Notarize The Document
The principal must sign a power of attorney before a notary public. The agent may also be required to sign the document.
- Distribute Copies
The agent should receive a copy of a power of attorney from the principal. They must also give copies to other parties needing them, like banks or healthcare providers.
Considerations Before Granting Power Of Attorney
Before creating a power of attorney, the principal should think about the following:
Trust
The principal should trust the agent to represent their interests.
Responsibility
The agent must be trustworthy and able to fulfill the obligations under a power of attorney.
Specific Powers
The principal must give careful consideration to the same powers they want to provide the agent and whether those powers are appropriate given the agent’s skills and the principal’s needs.
Duration
The principal should say how long or under what circumstances a power of attorney will be valid.
Revocation
The principal must know they can revoke a power of attorney anytime and for any reason.
Communication
The principal should let the agent know their needs and expectations and give them any information they need to do their job.
A power of attorney can be a handy tool for managing finances, making medical decisions, or conducting legal transactions. Before signing this contract, the principal and the agent must thoroughly understand their respective roles.
You should talk to a lawyer if you are considering getting a power of attorney. They will be able to guide you through the procedure and look out for your best interests. A lawyer can also help you understand the legal repercussions of giving someone else the power to act on your behalf.
Conclusion
A power of attorney is a legal document that designates another individual with authority to act on your behalf in specific situations. A power of attorney can take many forms, each with a different purpose and level of authority. The agent must draft the document, select the type of power of attorney, sign and notarize it, and deliver copies to the relevant parties.
Before granting power of attorney, it is important to consider trust, responsibility, specific abilities, duration, revocation, and communication. Seeking an attorney’s advice can ensure that your interests are protected and that you and your agent fully understand your rights and responsibilities under the agreement.
