What is Power Of Attorney(POA) ?
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Introduction
Power of attorney is essential in the event that you are incapable or not physically present to make decisions on your own behalf.
A power of attorney (POA) authorize you to appoint someone to manage your property, medical or financial affairs.
A POA is typically used if you can’t manage your affairs. Each type gives ,the person who will make decisions for you, a different level of control.
Some POAs take effect immediately after thay are signed, and others only kick in after you are incapacitated.
What does a Power Of Attorney do ?
The POA gives the attorney in fact (also known as the agent), the power to make decisions about your affairs.The type of POA you create directs which affairs you are granting power over.
A power of attorney (POA) is a legally binding document that appoints someone to manage your affairs.
Depending up on which POA you choose, the decision making power of an attorney-in-fact takes effect at different times.
Responsibility of the agent of a power of attorney :
The agent or attorney-in-fact is a guardian.
That means the agents are responsible for managing some or all of another person’s affairs.
The guardian must work responsibly and practically in a way which is fair to the person whose affairs they are managing.
Anyone who is violating these duties may face criminal charges or be held liable in a civil lawsuit.
Limits of a power of attorney :
No power of attorney document is legally binding before it is signed and executed according to the laws of your state. f her umm go
Before the POA document goes into effect, no agent can make decisions on your behalf.
When you appoint an agent, you must also be of sound mind.
Any thing that need clarification can be mentioned in your POA document.
So by having the help of an attorney can simplify the process of selecting an agent to have power of attorney.
Types of Power Of Attorney
There are various types of POA available, and each serves a different purpose. It might be important that the same person must also be of sound mind want the person handling your finances to be different from the person handling your health care decisions.
Each type of POA has its benefits, so it is important to understand all of your options before making a decision.
Here are some of the options
Durable/Non-Durable POA
Springing POA
General POA
Limited POA
Specific POA
Medical POA
Financial POA
Military POA
What is a Durable Power Of Attorney ?
If you are incapasitated because of an illness or a sudden accident, a durable power of attorney document allows your attorney-in-fact to continue acting in your interest.
You can specify in your POA document whether you would like your agent to have authority when the document is signed or once a doctor declara you as incompetent.
You can also specify which doctor should have the authority to ensure that you are incompetent and they are a medical professional whose opinion you trust.
Key Takeaway :
A durable POA remains effective after you are incapacitayed, regardless of whether it went into effect before that event.
Non-durable POA
A non-durable POA ceases to be effective the moment you are declared incapacitated.
What is a Springing Power Of Attorney ?
A springing POA activates as soon as you are declared mentally incapacitated or physically incapacitated.
A Springing POA becomes effective as soon as you sign it.
The clarity around a declaration of physical or mental unfitness is a drawback of a springing POA.
For example, if you are diagnosed with onset dementia and your ability to make sound decisions is thrown into question,it may be difficult to obtain proof that you are medically incompetent.
Key Takeaway :
If you are declared incapacitated or incompetent this POA kicks in. It was inactive before that time.
What is the General Power Of Attorney?
General power of attorney provides high powers to your attorney-in-fact. These powers can include :
Handling financial and business transactions.
Buying life insurance setting claims.
Operating business interests
Making gifts
Employing professional help.
General POA is helpful if you will be out of the country and need someone to handle certain matters or when you are physically or mentally incapable of managing your affairs.
A general POA is also included in an estate plan to make sure someone can handle financial matters.
Key Takeaway :
A general power of attorney is an overall POA that gives attorney-in-fact power regarding financial decisions.
What is a Limited Power Of Attorney ?
Limited power of attorney is otherwise known as a special power of attorney.
Limited POA document limits the agent to a set number of conditions.
What powers an agent may exercise can be specified by signing a special power of attorney.
If you can’t handle certain affairs due to other commitments or health reasons then you might use this POA .
A limited power of attorney grants your agent only the specific powers listed in provisions of your POA document.
Some common matters specified in a special POA document are selling property, managing real estate,collecting debts and handling business transactions.
Key Takeaway:
Special POA applies only to specific powers listed in the document and is more limited than a general POA.
Other Power Of Attorney Types
An agent’s decision making powers can expand or restrict by other specific types of POA.
What type of POA you need is a personal decision you may discuss with your family when you talk about estate planning.
If you are planning for end-of-life decisions , then it allows you to spend more time focusing on the people and activities you love.
What is a Medical Power Of Attorney ?
A medical power of attorney is otherwise called as a durable healthcare power of attorney. Medical POA grants your agent authority to make medical decisions for you.
If you are unconscious, mentally incompetent or otherwise unable to make decisions on your own,then your agent will have this power
In a medical POA, many states allow to include your preference for being kept on life support.
In some states you can combine parts of the health care POA and living will into an advanced health care directive.
Key Takeaway :
This POA allows you to make medical decisions for you and is sometimes combined with a living will.
What is a Financial Power Of Attorney ?
This POA allows a fiduciary to conduct your financial matters when you are not present. This can be a non-durable POA that covers situations where you can’t be present, such as an extended time spent abroad. It can also be a durable financial POA that covers instances when you are incapacitated or mentally incompetent and therefore cannot make sound financial decisions for yourself.
Key Takeaway :
This POA grants an attorney-in-fact the power to make financial decisions on your behalf when you are incapacitayed or otherwise unable to.
What is a Military Power Of Attorney?
Military powers of attorney vary in their coverage and to what authority you grant is entirely up to you.
Due to the travel involved in military roles, having a power of attorney for a military spouse can be beneficial for everyday situations such as bank account accessing, registering a car or taxes filing.
It is a good idea for anyone for have a power of attorney in the military but it can be critical for those who are deployed.
Key Takeaway:
This POA applies to activate-duty service members and their families and has special considerations for military lifestyles.
Three tips for creating power of attorney
Once you detect which power of attorney you need, you need to decide who your agent will be.It is important to remember that any attorney-in-fact is responsible for your best interests and must advocate on your behalf to the best of their ability.
The following steps can simplify the process of delegating power of attorney.
1. Decide how many agents you will need
To represent your interests you can appoint more than one attorney-in-fact and you also have to decide whether these agents must work together or separately in making decisions.
If you have complex medical or financial affairs, then multiple agents might be beneficial.
But multiple agents can introduce scheduling conflicts to the process and may delay to take important decisions.
Similarly, if there is only one agent then there are limitations such as if suddenly the original agent is unable to for some reason then you have to appoint a backup agent.
2. Find someone whom you trust with your best interests.
At the time of selecting an agent for your POA the trust is the key .
You want someone who will look out for your best interests and respect your wishes.
You grant power of attorney to someone you trust to take the responsibility more seriously.
3. Make sure you or the third party receive updates
It is important for an agent to keep perfect records of all transactions done on your behalf and to provide you with periodic updates.
If you are unable to review these updates,then direct your agent to give an account to a third party you approve of.
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