Power of Attorney
A Power of Attorney (POA) is a legal document that gives one person (known as the agent or attorney-in-fact) the authority to act on behalf of an individual who can no longer advocate for themselves. Generally, this happens when the individual is ill, absent, or otherwise incapacitated. The agent’s authority can cover legal, financial, and personal matters.
A POA is crucial for proactive planning, especially in anticipation of unexpected circumstances that may incapacitate the principal. It establishes clear (and legal) guidelines for who is authorized to step in and make decisions. Therefore, it is important for the principal to select a trustworthy individual to avoid any misuse of the agent’s responsibilities.
Here are the key components of the document and its process:
Principal
The individual granting authority. They must be of sound mind when the POA is created, ensuring they fully understand the implications.
Agent/Attorney-in-Fact
The person authorized to make decisions on the principal’s behalf. This should be someone the principal trusts implicitly.
Scope of Authority
This defines the actions the agent is permitted to take. The scope can be precise and focused (such as managing a specific bank account) or sweeping (such as handling all financial matters).
Durability
A POA is either durable or non-durable.
Durable: This type of POA remains in effect even if the principal becomes incapacitated.
Non-Durable: This ends when the principal becomes incapacitated.
Effective Date
Some POAs become effective immediately upon creation, while others only take effect when certain conditions are met—usually when the principal becomes incapacitated.
Types of POA
General Power of Attorney
Grants broad authority to act on the principal’s behalf in various matters—financial, legal, and business-related. This type is used when the principal requires comprehensive assistance in managing their affairs.
Limited or Special Power of Attorney
Limits the agent’s authority to specific tasks or sets of tasks, such as selling a property.
Durable Power of Attorney
This remains effective even if the principal becomes mentally or physically incapacitated. It is commonly used for long-term planning, particularly when illness or aging is a concern.
Springing Power of Attorney
This takes effect only when a specific event occurs, such as the incapacitation of the principal, at which point the agent “springs into action.”
Medical Power of Attorney
Grants the agent the authority to make healthcare decisions on behalf of the principal. For example, if a life-support decision is needed, the POA agent is empowered to act.
Financial Power of Attorney
Authorizes the agent to handle the principal’s financial matters, such as managing bank accounts, paying bills, and overseeing investments.
Revocation
The principal has the authority to revoke a POA at any time, as long as they are of sound mind. The revocation must be in writing, and all parties involved—such as banks, healthcare providers, or investment firms—must be notified with documentation.
When Does a POA End?
A POA ends under the following circumstances:
The principal revokes it
The principal passes away
The agent is no longer able to perform their duties
In a non-durable POA, when the principal becomes incapacitated
With extensive experience in drafting all types of Power of Attorney documents, our attorneys are highly qualified to handle your needs. No matter your reason for creating this document, we ensure everything is in order and free of loopholes. Contact us to secure your affairs today.
