Do you know what is a Power of Attorney? Do you know what the benefits of granting a Power of Attorney are?
Have you considered finding a Power of Attorney to handle your affairs?
A Power of Attorney is someone who is given legal authority when you’re unavailable to make decisions. It’s something you should consider if you aren’t always able to manage tasks.
Here’s what you need to know about Power of Attorney and why you should consider it:
Contents
The Document
A Power of Attorney (POA) is a document in which you appoint a third party to handle your affairs. These can range from business obligations, financial, property, or medical responsibilities.
You can choose what level of responsibility to give the third party. There are also different rules regarding what type of POA you wish to assign.
A POA can be an individual or an organization. Make sure you take your time to research who your POA should be.
Now let’s look into the different types of POA available.
General Power of Attorney
This gives a broad range of powers to a third party — known as an agent. Some of these powers may include the following:
- Giving gifts or distributing assets
- Operating a business
- Employing professional assistance
- Settling lawsuits or claims
- Buying insurance
- Managing financial transactions
This type of POA is ideal for when you’ll be out of your jurisdiction and cannot sign a document. It also works if you suffer from a physical or mental disability.
As such, a General Power of Attorney is often part of an estate plan. As you accumulate assets, you might want to consider finding the right agent for your POA.
Durable Power of Attorney
This type of Power of Attorney gets created if you worry that you might become mentally incompetent one day. If you become mentally incompetent due to an accident, you might wonder what happens to a current Power of Attorney agreement.
A Durable Power of Attorney ensures that your current Power of Attorney remains in effect even if you become mentally incompetent.
In this Power of Attorney, you can specify which physicians can determine you to be mentally incompetent. This is crucial to ensure that the Durable Power of Attorney is active.
Special Power of Attorney
With a Special Power of Attorney, you can assign specific powers to your agent. Here are some of the responsibilities that you may include in a Special Power of Attorney:
- Handling real estate
- Handling personal property
- Collecting debts
- Managing business transactions
This type of Power of Attorney gets created when you can’t handle certain responsibilities. This is usually due to other commitments or health reasons.
Health Care Power of Attorney
This type of Power of Attorney is to grant power to an agent who can authorize medical decisions for you.
This type of Power of Attorney gets created if you are mentally incompetent or have another severe illness. Some states will also include a clause regarding life support within the Health Care Power of Attorney.
This is a Power of Attorney you might want to consider as you get older. If you have severe health issues, this is something you should consider.
Choosing the Right Agent for Your Power of Attorney
So how do you find the right agent for your Power of Attorney?
You need to make sure you find someone whom you can trust. You must know that agents can abuse their power. This is a concern you should keep in mind when choosing your agent.
It’s crucial that you know that your potential agent has your best interests. Anyone who has harmed you in the past should serve as a “red flag” for getting selected as an agent.
As a general rule, agents aren’t compensated for their responsibilities. Make sure you choose someone who wants to help you.
An agent can only face legal challenges if they abuse their power on purpose. An unintentional error will usually not result in legal liability.
Your agent has to keep records of your transactions completed on your behalf. They’ll also have to provide you with regular updates on their actions.
If you feel your agent is partaking in any wrongdoing, you should consult a lawyer.
You might have to contact a law enforcement agency as well. Make sure you also appoint a backup agent. This is to be done in case your initial agent is unable to work out.
Multiple Agents
You can appoint multiple agents to handle your Power of Attorney responsibilities.
If you do, you can assign different responsibilities to each agent. You can also state whether these agents should work jointly or separately. The major advantage of multiple agents is that they provide checks and balances among each other.
The major disadvantage of multiple agents is that they can slow down decision-making. If you care for efficiency, you might not care for multiple agents.
Revoking Power of Attorney
If you’re mentally competent, you can revoke your Power of Attorney at any time that you wish.
Your revocation should be in written form. It should also be signed by you with a witness present. In many cases, a notary public is an appropriate witness.
This revocation should then get delivered to your agent(s) and any third party with whom the agent(s) have been in contact. While there might be times where you’ll have to revoke the Power of Attorney, you want to try to get it right in choosing the best agent.
Now You Know What Is a Power of Attorney
Now that you know what is a Power of Attorney, you can decide whether you need one to handle your affairs.
Even if you’re in the best shape, it’s always wise to find an agent for any trouble that might come up in the future. A Power of Attorney will help you in assigning responsibility when you can’t look out for yourself.
Make sure you use a service to help you draft your Power of Attorney agreement. This will help you speed up the process and make it work best for your needs.
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