A power of attorney is an important document. It is, nevertheless, frequently disregarded in estate planning. People usually concentrate their efforts on their wills and trusts, naming a power of attorney at the last minute.
Any responsible adult, such as an attorney, banker, or accountant, can act as your agent. Your agent, however, could be a member of your family, including a spouse, adult child, and perhaps other relatives. By appointing a family member as your agent, you can avoid paying professional fees and retain confidential data about your finances and other personal problems “in the family.”
This is a significant decision that should not be handled carelessly. What you need to know to get it right is outlined here.
What Is A Power Of Attorney?
A power of attorney, often known as a POA, is a legal document that authorizes somebody you trust (the agent or attorney) to make decisions on your behalf (the donor or grantor) and represent you to others. The authority can be broad, encompassing all actions that the attorney can take, or it can be narrowed down to specific actions, such as paying bills, asset investment, property sale, or authority to transfer securities from the attorney’s name to another person’s name. You, the document’s “grantor,” “donor,” or “creator,” grant this ability in advance.
Is There A Difference Between Different Types of Powers of Attorney?
Powers of attorney come in various forms. It’s best if you do both simultaneously, which is normally when you’re evaluating or creating your will.
The following are the two types of powers of attorney:
- A Property and Financial Affairs LPA – This provides your attorney the authority to make financial and property decisions on your behalf. Handling your bank or building society accounts, collecting a pension or benefits, paying bills, or selling your house are all examples of this. Once registered, you can utilize it right away or keep it till you lose your mental capacity.
- A Health and Welfare LPA – This allows your attorney to make decisions about your everyday tasks (from grooming and clothing to eating), medical care, placement in a care facility, including life-sustaining medical care. It should only be used if you are incapable of making your own decisions, and you must agree to it while you are still capable of doing so.
What is the Function of a Power of Attorney?
A power of attorney template is available for purchase or download. If you do, double-check that it’s for your state’s standards as they differ. On the other hand, this document may be far too crucial to leave to chance that you received the correct form and processed it correctly. The signature of the individual who starts the POA must be notarized in many states. Witness signatures must also be notarized in some states.
Locating a family law attorney in your area is a better option to start the process of obtaining a power of attorney. If the cost of an attorney exceeds your budget, legal services agencies with certified lawyers are located in virtually every region of the nation.
While the specifics may vary, the following guidelines apply across the states:
- Put it down on paper
- Determine who the parties are
- Delegate Authority
- Define the term “durability”
- Notarize the Power of Attorney
- Make a note of it
- File it
Choosing a Power of Attorney
A POA, like the property deed for your house or automobile, gives you a lot of ownership power and responsibilities. In the event of a medical POA, it is truly a question of life and death. If you have a durable POA that has been mishandled or misused, you may face financial hardship or bankruptcy. Thus, you should select your agent with caution to ensure that your preferences are carried out to the fullest extent feasible.
It’s vital to appoint a person as your representative who is both trustworthy and capable. Because this individual will have the same legal authority as you, any errors made by your attorney may be difficult to redress.