A Power of Attorney (POA) is a legal document that gives legal authority to a person (the “attorney-in-fact”) to act on behalf of the principal (the person signing the POA) when the principal is unable to do so. A Power of Attorney can be used to make decisions about finances, business, real estate, and other important matters. If you’re thinking about a POA for someone in your life or for yourself, there are a few questions that you should ask that will help you make the best decision for your circumstances.
How Much Power Will the “Attorney-in-Fact” Have?
When it comes to granting a POA, there are different levels of power that the attorney-in-fact can be given. They can be given a Limited POA—meaning for a specific purpose or for a limited period of time, or a General POA—which grants the powers indefinitely, or until the POA is revoked. A POA for finances can be given for all aspects of an individual’s financial affairs, or just for specific things, such as real estate, business, day-to-day bill paying, etc. A POA for healthcare gives an individual the right to make medical decisions for the principal if they are unable to do so themselves. Your attorney-in-fact’s powers are decided by you when the POA is drafted. (It should also be noted that a POA ceases on the moment of your death—after you are deceased, it is the Personal Representative of your Will that will handle all the financial matters of your estate.)
When Should We Put Together the POA Document?
Once a principal is deemed “incompetent” it’s too late for them to grant a POA. You must address concerns about Power of Attorney before you need it. Most people think about having a POA for an older person, however, even younger people may benefit from a POA document. For example, if you’re in the military and you’re going to be deployed overseas, or if you travel extensively for business or pleasure, you may wish to have a POA in place for someone to handle your financial affairs while you are gone, or in the event that you’re rendered incapacitated during your absence. Even if you have a spouse, they will not automatically have access to accounts or properties that are under your name only.
Who Should Be Given Power of Attorney?
Choosing the right person to appoint as your “attorney-in-fact” is a serious decision, much like choosing the right Personal Representative that handles your last Will and Testament. You need to find someone responsible, thorough, and organized. This person may be a spouse, an adult child, a parent, a good friend or a trusted advisor. You should be aware that if the person you choose turns out to be untrustworthy and embezzles funds, you often cannot get those funds back.
You should not (and often cannot) grant power of attorney to the following people:
- Persons convicted of crimes related to violence, fraud, theft, breach of trust, etc. within the past 10 years.
- Persons whose business is to provide health or personal care services to you.
- Persons who are undergoing an undischarged bankruptcy.
DK Rus Can answer Your Power of Attorney Questions
If you have questions about granting a power of attorney, or anything else related to estate planning, please contact us today for more information and to set up a consultation.
