Article Date: Tuesday, December 04, 2007
A power of attorney is a legal document signed by you in which you authorize a person, generally referred to as your agent or your attorney-in-fact, to take steps or make financial decisions on your behalf if. Powers of attorney are commonly used when the person granting the power, known as the principal, becomes disabled because of accident, illness, mentally incapacity, or simply is out of the country and unable to conduct his or her own affairs.
What does a power of attorney do for me?
Ask yourself what would your family do if they didn't have the power to access bank accounts or manage your business affairs if you were in a car accident and in a coma. Further what would happen to your finances if you became mentally incompetent. A power of attorney for property authorizes someone to deal with and manage your property for you. Your property includes all your assets and finances unless you specifically exclude certain things.
What if I already have a will?
Also note that even if you have a will, your will only covers your affairs once you pass away. Your will has no effect during the time your alive but incapacitated.
Does the person I select as my attorney-in-fact have to be a lawyer?
Absolutely not. You may designate anyone to act as your agent or attorney-in-fact.
Why should I want to have a power of attorney?
It is important to have a power of attorney for property in case you, because of accident or illness, become incapable of making decisions for yourself. In it you authorize someone to act for you and your best interests in conducting your financial and property matters.
By preparing a power of attorney for property now, you can ensure that your property, your assets, your bank accounts, are managed by someone you trust who knows you and what you want, to act in your best interests, when you can no longer make the decisions for yourself.
What should I consider in making a power of attorney for property?
• Who do you want to manage your finances?
• What instructions will you give them?
• Will it be limited or general?
• Do you want more than one attorney?
• If your attorney can't act or continue to act, do you want to name a substitute?
How can I limit the power of attorney I give to my agent?
You may limit the power of attorney in any way you wish, either to limit the time during which it is effective, or the specific acts that your agent may undertake on your behalf. For example you may appoint someone to pay your bills, write checks, but do nothing else.
What is a general power of attorney?
A "general" power of attorney for property authorizes your attorney-in-fact to do anything that you can do, except writing your will.
What is a durable power of attorney?
A durable power of attorney continues to be effective even if you become disabled and incapable of managing your property. In a durable power of attorney, the document specifically indicates that it shall continue to become effective even in case of incapacity. If it doesn't say that, it is not a durable power of attorney and it cannot be used during your incapacity and it ends if you become incapable.
What if I become incapacitated and do not have a power of attorney for property?
If you become incapacitated and do not have a power of attorney, a court may appoint a Guardian or Trustee to manage your property. If someone who cares about you wants to be named "guardian" instead, they can go to court and ask to be named your guardian. It is far more efficient and cheaper if you appoint your own guardian before the need arises. Going to court is always expensive and wasteful.
Do I have to sign a power of attorney?
No, you are not required to do so. No one can make you sign a power of attorney. However it is very important to consider whether you should make a power of attorney for property. You also do not need to make a will, but in both cases, you may significantly assist your loved ones and protect your assets if you take pro-active steps to explain your wishes while you still can.
What does it mean to become incapacitated?
Being incapacitated generally means not being able to understand information that is relevant to a decision and not being able to evaluate the likely consequences of making it.
Who will determine whether I have become incapacitated?
Your power of attorney generally defines this. You might require in your power of attorney that two doctors must agree that you are incapacitated before the power of attorney comes into effect.
What are the responsibilities of the person I appoint?
When the power of attorney for property is in effect, the person you have authorized to act for you must act in your best interests and keep a complete record of all transactions made on your behalf.
Your representative can do anything you would do, including selling your house, unless you set up limits or restrictions in your power of attorney for property. They cannot however change your will.
How long does the power of attorney last?
Unless you set a specific time-frame, a power of attorney lasts until you die or recover sufficiently to resume control of your own affairs.
Can I revoke a power of attorney after I have signed it?
As long as you have capacity, you can revoke any power of attorney you have signed. The procedure for doing so is generally very simple and may be accomplished through a short written statement to that effect.
What if I already have a power of attorney for health care?
A power of attorney for health care does not apply to your property or your finances, and many states in fact require that the two documents be kept separate.
Click here to find your state's Power of Attorney for Property Form.
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