What Is a Power of Attorney ? POA –
A power of attorney (POA) is a legal document that gives another person the authority to act on your behalf in certain legal or financial matters. The person you appoint to act on your behalf is called an “attorney-in-fact” or “agent.” The authority granted through a power of attorney can be limited to a specific task or event, or it can be broad and allow the agent to handle a wide range of matters on your behalf.
Types of power of attorney (POA)
There are two main types of power of attorney –
- Durable power of attorney
- Springing power of attorney
- Durable power of attorney – This type of POA remains in effect even if the person granting the power (the “principal”) becomes incapacitated or unable to make decisions for themselves. A durable power of attorney can be an important tool for planning for the possibility of incapacitation.
- Springing power of attorney – This type of POA does not take effect until the principal becomes incapacitated or unable to make decisions for themselves. It “springs” into effect at that point, allowing the agent to act on the principal’s behalf.
There are also different types of power of attorney that can be used for specific purposes, such as –
Medical power of attorney – This type of POA allows the agent to make medical decisions on the principal’s behalf in the event that the principal is unable to do so.
Financial power of attorney – This type of POA allows the agent to handle the principal’s financial affairs, such as paying bills, managing investments, and handling banking transactions.
Real estate power of attorney – This type of POA allows the agent to buy, sell, or manage the principal’s real estate on their behalf.
It’s important to choose an agent you trust and to carefully consider the scope of their authority when creating a power of attorney. You should also make sure to properly execute the document and follow the requirements of your state’s laws.
Choosing a Power of Attorney (POA)
When choosing a power of attorney, it’s important to choose someone you trust to act in your best interests and handle your affairs responsibly. Here are a few things to consider when selecting an attorney-in-fact.
- Relationship – You should choose someone you know well and trust, such as a spouse, family member, or close friend.
- Compatibility – Make sure that the person you choose is compatible with your values and wishes. It’s important that they understand your goals and are willing to act in accordance with them.
- Ability to handle the responsibility – Consider whether the person you’re considering has the time, knowledge, and skills necessary to handle the responsibilities of being an attorney-in-fact.
- Geography – If you have assets or affairs that are located in different states, you may want to consider choosing an attorney-in-fact who is located nearby to make it easier for them to handle your affairs.
- Alternates – It’s also a good idea to choose one or more alternate attorneys-in-fact in case your primary choice is unable or unwilling to serve.
It’s important to discuss your wishes and the responsibilities of being an attorney-in-fact with the person you’re considering before you grant them power of attorney. You should also make sure to properly execute the power of attorney document and follow the requirements of your state’s laws.
Some Benefits of Power of Attorney
The power of attorney is a legal document that grants someone the authority to act on your behalf in various matters. Here are some of the benefits of having a power of attorney:
- Flexibility: A power of attorney can be customized to fit your specific needs and circumstances. It can be as broad or narrow as you want, and it can be limited in duration or scope.
- Convenience: A power of attorney can be used to delegate important tasks and decisions to someone you trust, which can be helpful if you are unavailable or incapacitated.
- Protection: A power of attorney can protect your interests and assets by allowing someone you trust to manage your affairs in your absence or incapacity.
- Peace of mind: By having a power of attorney, you can feel more secure knowing that your affairs are in the hands of someone you trust and who has your best interests in mind.
- Access to expertise: If you appoint a knowledgeable and experienced attorney or agent to act on your behalf, you can benefit from their expertise and guidance in making important decisions.
- Continuity: A power of attorney can ensure continuity of your affairs and prevent disruptions in your affairs in case of your absence or incapacity.
Overall, having a power of attorney can provide many benefits, including flexibility, convenience, protection, peace of mind, access to expertise, and continuity. However, it is important to carefully consider who you appoint as your attorney or agent, and to make sure that the terms of the power of attorney are clear and well-defined.
Disadvantages of Power of Attorney
While the power of attorney can provide many benefits, there are also some potential disadvantages that should be considered. These include:
- Abuse: There is a risk that the person appointed as the attorney or agent may abuse the authority granted to them and use it for their own benefit or to the detriment of the person granting the power of attorney.
- Misunderstanding: There may be a risk of misunderstanding or miscommunication between the person granting the power of attorney and the attorney or agent acting on their behalf, especially if the terms of the power of attorney are not clearly defined.
- Limited control: Once the power of attorney is granted, the person granting it may have limited control over the decisions and actions of the attorney or agent, which could be a disadvantage if they disagree with the decisions made on their behalf.
- Revocation difficulties: Revoking a power of attorney can be difficult, especially if the attorney or agent has already taken actions or made decisions on behalf of the person granting the power of attorney.
- Legal complications: The power of attorney can sometimes lead to legal complications, especially if there is a dispute or disagreement over its terms or execution.
Overall, while the power of attorney can provide many benefits, it is important to carefully consider its potential disadvantages and risks. It is important to choose an attorney or agent who is trustworthy and who will act in the best interests of the person granting the power of attorney, and to clearly define the terms and scope of the power of attorney to avoid misunderstandings and potential conflicts.
Personal power of attorney
Power of Attorney is a legal document by which you, or the “Principal”, declare another person or a group of individuals as your legal representative(s), or the “Agent(s)”, also known as “Attorney-in-Fact”, and hence grant them the right to act on your behalf, to sign your name on legally binding documents, such as contracts, agreements, deeds, etc., either in all cases or only within the scope of granted powers. Various types of Power of Attorney documents allow for more flexibility in granting specific rights to the “Agent”, as well as restricting the “Agent” to perform only specific actions, within the outlined scope of the granted authorization.
At the same time, Power of Attorney document can assign broad, and even unlimited, powers to the “Agent”. Depending on the circumstances, you may choose to allow two or more people to act as your legal representatives, by requiring that in the order for the documents signed on your behalf to have legally binding power; these documents should be signed only jointly by all appointed “Agents”. However, no matter what type of a situation you are facing, and also whether you are planning to grant full or limited powers to the appointed “Agent(s)”, the most important thing to bear in mind is that this should always be a person or an organization whom you trust the most.
The “Agent” may be a close family member, one of your friends, your legal advisor(s) or even a bank and a similar agency.
It is of outmost importance to understand the difference between the various types of the Power of Attorney which may be available to you. When planning to use the document outside of the United States it might not be a bad idea to arrange with your representative in the target country to have the document prepared for you or contact the local consulate of such country to verify the requirements, as many foreign jurisdictions may have their unique requirements as to how such instruments should be drafted in terms of wording, spacing and even dating the document. For instance, in Russia it is a must to have the date of the document spelled out.
TYPES OF POWER OF ATTORNEY DOCUMENTS
On a very basic level, there are two main types of Power of Attorney documents. These are: General Power of Attorney and Special Power of Attorney documents.
The General Power of Attorney document refers to a legal instrument that grants unlimited in scope and duration powers to the “Agent(s) by allowing the appointed individual or an organization to act as your legal representative and to make decisions on your behalf in all legal and financial matters, until such time as the Power of Attorney is revoked or expired.
The Special Power of Attorney document identifies the limits to be imposed upon the “Agent(s)”, hence restricting the scope and/or duration of that person’s or entity’s powers to as much as a single type of conduct or a certain transaction. The limited in duration Power of Attorney documents specify an expiration date after which the document becomes invalid. While the limited in scope Power of Attorney documents grant the “Agent” rights to engage in a specific, for instance, a financial or real estate, transaction on the behalf of the “Principal”.