Power of Attorney
A power of attorney document (POA) is an important part of estate planning that helps ensure your wishes are met during your lifetime. A well-written POA allows you to maintain control of your own affairs even when mentally incapacitated by designating someone to carry out certain decisions on your behalf. Without a POA in place, courts may assign someone of their choice to make financial and property decisions for you.
What is a Power of Attorney?
A power of attorney is a legal document that gives an agent, or attorney in fact, the authority to handle legal or financial matters on the principal's behalf. The principal is the individual granting authority in a POA. In a POA, you can dictate the scope of authority, when the powers will take effect, and any conditions that would terminate them. You can also authorize more than one agent or name successor agents to take over the role if necessary.
While state laws and terms vary, the following are common features that you can include in your POA.
- General power of attorney: Grants broad financial and legal authority, such as control bank accounts, pay bills, and buy and sell real estate.
- Durable power of attorney: Authorizes powers to continue even if you become incapacitated. Without a durable POA clause, authority typically terminates under incapacitation.
- Springing power of attorney: Takes effect under predetermined conditions, such as incapacitation or living abroad. Without this springing POA clause, authority typically takes effect immediately.
Similar to a POA, an advance directive allows you to appoint an agent to make health-care decisions on your behalf. Read this article to learn more about the difference between a financial power of attorney and advance directive.
FAQs
What are the most common types of power of attorney?
Powers of attorney commonly vary in the following ways.
- General Power of Attorney: Grants the agent broad authority, as allowed by state law.
- Limited (or Specific) Power of Attorney: Grants the agent authority only in specific matters or events.
- Durable Power of Attorney: Continues even if the principal becomes incapacitated.
- Springing Power of Attorney: Begins only when a specified condition is met, such as the principal's incapacity.
Can you revoke a power of attorney?
Yes, you can revoke a power of attorney at any time.
Who should have a power of attorney?
Many people can benefit from a power of attorney. For example, if you're going abroad for an extended period of time and wish to authorize someone you trust to make legal or financial decisions on your behalf while you're away. Or, anyone who wants to protect their assets or state treatment preferences in case of incapacitation can benefit from a POA or advance directive.
Can you amend a power of attorney?
Yes, you can change your power of attorney or create a new one to match your circumstances at any time.