Power of attorney

The Power of Attorney (POA) is a legal document that grants an individual, known as the “agent” or “attorney-in-fact,” the authority to make decisions and act on behalf of another person, referred to as the “principal.” This legal arrangement is a powerful tool that allows individuals to manage their affairs, especially in situations where they may be unable to do so themselves.

Understanding the Power of Attorney

A Power of Attorney is a versatile legal instrument that can be customized to address specific needs and preferences. It is essential to understand the different types of POAs to choose the one that best suits your circumstances.

General Power of Attorney: This grants broad powers to the agent, allowing them to make a wide range of decisions on your behalf. It is often used for short-term needs, and this POA ends when you (the principal) become incapacitated.

Limited or Special Power of Attorney: This gives the agent authority for only specific and limited actions, making it ideal for situations where the principal needs assistance with specific tasks.

Durable Power of Attorney: A durable POA remains in effect even if you become incapacitated. It is a crucial component of long-term planning. There are two main types of durable POA – Financial and Medical.

Assigning a Power of Attorney

Selecting a trustworthy and reliable agent is paramount. This individual should be someone who understands your wishes, is capable of making sound decisions, and is willing to assume the responsibilities outlined in the document. It’s also important to name a successor agent should the primary be unable to carry out their duties – this ensures that your agent continues to be a trusted party that you know will carry out your wishes.

While it is possible to find generic POA forms online, it is advised to consult with a legal professional to draft a document tailored to your specific needs. The document should clearly outline the powers granted to the agent. You, as the principal, must sign the POA in the presence of a notary public to ensure its legal validity, and the universal requirement is that you must be mentally competent when you sign. Power of attorney can be revised or revoked at any time as long as you’re deemed mentally competent. Attorneys may advise that these documents be regularly reviewed and updated.

The idea of competence can be contentious, especially when you’ve established a power of attorney that only becomes active once you are declared incompetent. One way to potentially avoid that issue is to name the doctor(s) that will be able to determine your competence and what agreements must happen to have you declared incompetent. Of course, the best way to mitigate legal risk to discuss this and any concerns you may have with your legal counsel.

The Power of Attorney is a valuable legal tool that empowers individuals to plan for the unexpected, ensuring their affairs are managed according to their wishes. By understanding the types of POAs, following the proper steps in assigning one, and recognizing the appropriate times to do so, individuals can take control of their future and mitigate potential challenges that may arise in managing their personal and financial matters. It is always recommended to consult with legal professionals to ensure the POA aligns with specific needs and complies with relevant laws and regulations.