Power Of Attorney
A Power of Attorney, or POA, is a legal document that grants authority to an attorney-in-charge or legal representative to make decisions on behalf of the person. The designated attorney may have broad or limited authority, including areas like medical decisions, financial affairs, or property matters for the person.
A POA starts to work when the person falls ill or gets hurt. If the person can't get money or a legal deal, the lawyer can do it for them.
When the person who creates the POA dies or cancels it, it ends. If a court stops it, a divorce happens, or the lawyer can't do their job, it also ends.
TYPES OF POWER OF ATTORNEY
1. General Power of Attorney –
The general power of attorney offers the person acting as agent broad power and significant authority over the principal's business. The person selected is responsible for a number of tasks on behalf of the principal, like buying or selling of residential property and the establishment of contractual relationships.
2. Limited or Special Power of Attorney -
A limit or specific power of attorney is the right solution if someone wishes to restrict the agent's authority. Before a restricted power of attorney is notarized, its signer must give complete details on the precise extent of the agent's duties. To ensure that you know exactly what is covered by a special power of attorney, consult a lawyer.
3. Durable Power of Attorney -
A durable power of attorney is only effective until the person who granted it appoints an attorney to work in its place. A non-durable POA, on the opposite hand, terminates on the time specified or is terminated. Nevertheless, an important question occurs in the event when the agent becomes incapable. Is the POA still in effect?
The principle may desire the POA to be enforceable in such situations notwithstanding being unable to communicate. A long-lasting power of attorneys may be utilized to describe a principal's preference, for example allowing their spouse to behave as their agent in the event that they become incompetent. This guarantees that even in the event of the principal's coma, the spouse will continue to have decision-making authority.
4. Medical or Healthcare Power of Attorney -
The principal has the right to select what they want in terms of care in the event of a serious medical condition. In the event of a life-threatening condition, the agent has the right to make decisions on behalf of the principal under a medical or healthcare power of attorney (POA). Although the main recipient may be sick enough to make choices for their own, the majority of health POAs fall into the durable category.
It is recommended that the principal contact legal counsel in each of the above mentioned circumstances prior to selecting an agent. Additionally, it is essential for them to have a thorough understanding of the details that should be included in the power of attorney by having the attorney lead them throughout each step of the notarization process.
HOW DOES POWER OF ATTORNEY WORKS
RephraseIt's important that the templates match the specific state laws where you live, no matter how you get them. You can't just assume that the power of attorney (POA) documents you have are right. You need to check them before you start the POA process.
Your first step should be to find a family law lawyer. If you can't afford one, there's help available. Legal service offices are one option. The Legal Services Corporation website is another. They can connect you with legal help. And if you qualify, you might get free help.
Obtaining the principal's signature notarized is required in many states. It could also be mandatory for the notary public to notarize the witness's signature in certain situations. Additionally, certain legal rules might not be applicable in all situations. For example, the POA principal form is not standardized.
Rules and regulations differ depending on where the principal resides. Although the durable POA is commonly utilized, the principal is not allowed to assign some powers, such as creating or changing a will, entering into a marriage, or submitting a vote.
PROTECT AGAINST POWER-OF-ATTORNEY ABUSE
While a Power of Attorney (POA) provides significant authority over your finances, it comes with inherent risks due to the lack of regular oversight.
Forms of POA abuse may manifest as:
- Forgery of the POA document.
- Pressure from your agent to grant undesired authority.
- Misuse of your funds for personal gain rather than your well-being.
- Unauthorized actions by your agent, such as altering beneficiaries on insurance policies or retirement plans.
To protect against POA abuse:
- Appoint only someone you deeply trust and ensure they understand your wishes. Specify in your POA that your agent must regularly report financial transactions to another person.
- Inform friends, family, and financial advisers about your POA to enable them to oversee your interests.
- Acknowledge that POA designations can be altered. If your agent proves unsuitable for managing your finances, you can revoke or cancel the POA.
- Exercise caution if someone offers to handle your finances and poses as a newfound "best friend." If an offer seems too good to be true, it likely is.
- Many states have protective laws to ensure agents act appropriately on your behalf, reducing the risk of POA abuse.
HOW TO SET UP A POWER OF ATTORNEY
- Put It in Writing: Although certain areas can recognize oral Power of Attorney (POA) grants, verbal instructions alone are not a trustworthy alternative. To avoid disagreements and miscommunication, it is important that you clearly state in writing all of the authority assigned to your agent.
- Use the Proper Format: There are multiple kinds of POAs, from lifetime to short-term grants. Determine the authority you want to provide and create a POA that reflects your unique preferences. Ensure that it complies with your state's laws by studying online or obtaining advice from a nearby estate planning attorney. Choosing legal counsel is the wisest course of action.
- Identify the Parties: Determine the Parties: The principal is the person who grants the authority of attorney, and an agent or attorney-in-fact is the party who receives it. Verify whether any particular phrase is required by your state.
- Delegate the Powers: A POA can be broad or limited based on the principal's preferences. However, each granted power must be clearly defined, even in a general POA. Vague statements like "I delegate all things related to my life" are not acceptable.
- Indicate Durability: Generally speaking, a POA expires if the primary is rendered unable. The POA must be written with durability, meaning that it remains in effect for the principal's lifetime unless revoked, in order to keep its powers in such circumstances.
- Notarize the Power of Attorney: A notary public is mandatory in many states for powers of attorney. Getting a notary's seal and signature on the document can help the agent's tasks, even in states in which they don't.
- Record It: Although not all power of attorney agreements (POAs) require official governmental recording in order to be legally binding, a lot of estate planners and people do so in order to establish a formal record of the POA's existence.
- File It: Some states mandate specific types of POAs to be filed with a court or government office for validation. For instance, Ohio requires filing a POA used to grant grandparents guardianship over a child with the juvenile court. Additionally, a POA transferring real estate must be recorded in the county where the property is located.
