What is a Power of Attorney (POA)?
Let’s start with what it isn’t. A Power of Attorney does not grant a person the right to be an attorney. You may laugh at this but we’ve been on a case where the the defendant tried to draft a POA for his friend so that his friend could be his lawyer. It does not work that way.
What Power does it give?
Just about whatever you want it to give on your behalf only (not to give someone the power to be a lawyer, you don’t have that authority). You could create a POA with a very specific authority such as to sign the deed of your house during your closing if you were unavailable. Or you could create a broad spectrum by having your POA state that your agent can do anything that you could do if you were present.
There are four main types of POAs: general, springing, limited, or durable. We recommend speaking with a professional to find out which POA is right for your situation. A general POA gives the authority to act for another person in specified or all legal or financial matters. Basically, you’re allowing another person to make legal, financial, and or medical decisions on your behalf.
Why would I want to do that?
A POA would be useful in many situations. Some of the more common ones are:
- As part of an estate planning package to take effect after you’ve passed
- If you’re planning to undergo surgery or risky medical treatment
- For an attorney or CPA to gain access to financial accounts for tax purposes
- For someone to sign documents for you or pay your bills if you are unable
- …and more.
Who do I give this power to?
Be sure your agent is someone that you trust completely. This person will be making critical decisions on your behalf. It’s important to talk with this person and let them know your wishes in advance. Most people ask a spouse, parent, or sibling to be their agent but it can be anyone over the age of 18 whom you trust to handle the situation. Be aware that asking someone to be your agent is not to be taken lightly. Depending on the situation for your POA, your agent could, quite literally, hold your life in their hands.
Can I change my mind?
Absolutely! If you decide you no longer need your POA or you’ve decided to change your agent, you simply revoke your POA and draft a new one if needed.