The Importance of a Power Attorney
What will you do in the event you cannot take care of yourself? A power of attorney prepares you for that situation.
What is it?
In the event that you cannot make decisions for yourself, a Power of Attorney (POA) gives someone else the authority to make those decisions for you. A legal document grants one individual (the agent or attorney-in-fact) authority to act on another individual (the principal). The agent can have a broad legal authority or limited authority to make legal decisions about the principal’s property, finances, or medical care. The person who receives the authority is referred to as the agent or attorney-in-fact.
Who should get it?
There are all types of people that can benefit from a POA, such as retirees, those of an advanced age, and military personnel. Overall, if you are at risk of illness or disability that may hinder your ability to manage your finances, or if you are not able to sign legal documents, a POA allows you to give another person the power to make decisions on your behalf.
Who should I choose as my guardian?
This is one of the most important decisions when it comes to a POA, as this person will have access to your finances, your house, and most importantly, your health. Choose someone who you can wholeheartedly trust, such as a child or a spouse. The only requirement for someone to be a POA is that they must not be a minor, however remember being a POA is not a fit for everyone. When making your selections ask yourself these questions:
- Do they have a busy schedule?
- Will they care enough to make the correct decisions for you?
- What do they do in grief-stricken situations?
- Are they in good health to best serve you?
When is the right time to assign a POA?
To first create a POA, you have to be of sound mind and body, since POAs act as a preparation measure for when you can no longer represent yourself best. Both parties must sign the power of attorney document and a third party is usually required to witness it. Best case scenario, everyone would have a POA, in the event of an accident or unexpected illness, so early preparation is best practice.
When will it take effect?
The purpose of a POA is to ensure that you are taken care of in the event that you can no longer take care of yourself. Whether the situation be physical, such as falling into a coma, or mental, such as suffering from severe mental illness. There are different types of POAs that have a broad range of authority and duration. A spring POA only comes into action once you are declared incapacitated, such as after a hospitalization. A durable POA is in effect when you're both conscious and incapacitated. For example, you could give someone the power to make decisions for you because they're better with finances or have more time than you to understand it.
Why should I have one?
A power of attorney permits another person to perform specific legal acts on your behalf. This document can allow another person to make decisions regarding finances, healthcare or the care of your children. As well as allow access to operate a bank account, buy and sell property, or change investments.
Trusted professionals such as lawyers, doctors, and accounts can help you decide what the best route is for you! Remember the legal authority a POA has is laid out in your agreement and they cannot do whatever they want with their power. However, you have the right to revoke the power of attorney at any time, as long as you are still competent. You can do this by creating a new power of attorney document that explains it revokes any previous documents, physically destroying the original document (although this can be difficult to prove and can lead to confusion), or submitting a written statement revoking the POA. Make sure to select someone you trust and someone who can reliably fulfill their responsibilities to be your power of attorney.