For example, you could establish a POA that only happens when you are no longer capable of handling your affairs yourself—or one that goes into effect immediately so your agent can act for you in your absence. Some powers of attorney are limited. For instance, the POA could merely empower someone to represent you at a real estate closing in another city.
If you have property that is only in your name, your spouse would need a power of attorney to take legal or financial actions related to that property like selling it. Anyone can set up a POA. One way is to find a template online that satisfies the requirements of the state in which you live, and execute it according to your state's guidelines it may need to be notarized and require witnesses. POAs differ depending on when you want the authority to start and end, how much responsibility you want to give your agent, and the laws in the state where you live.
There is no uniform POA common to every state. Using an attorney to draw up the POA will help ensure that it conforms with state requirements. Since a POA may be questioned if an agent needs to invoke it with a bank or financial services company, you should ask an attorney about prior experience in drafting such powers. You want to select someone not only familiar with state requirements, but also with the issues that can arise when a power is invoked.
This way, the attorney can use language that will make clear the full extent of the responsibilities that you wish to convey. To set up a legally binding POA, the principal must have sufficient mental capacity when the document is drawn up. This means that they must fully understand the nature and effect of the document. It also means that if you have an ill parent who is already incapacitated, you won't be able to get a power of attorney to act on their behalf.
The POA can be canceled or revoked at any time simply by destroying the original document and preparing a new one, or by preparing a formal revocation document informing all concerned that the POA is no longer a valid instrument.
POAs are not just reassuring; they may become the instruments that protect your financial and real estate interests, your health, and even your manner of dying. If you are incapacitated and have no POA designated to take the wheel, your family will likely be forced into costly and time-consuming delays. Principals have to set up POAs for themselves. A family can't "get" a POA when they suddenly realize that an elderly relative is no longer able to manage their affairs.
In this situation, a court would have to appoint a guardian or conservator , and neither the individual nor their family would have any control over the appointee. In some states, the guardian is required to post a bond and file a detailed inventory and accounting of the person's relevant assets.
The entire affair is more complicated, more costly—and more public —when a POA is not already in place. There are several types of POAs, as well as various degrees of responsibility that you can delegate.
This starts when it is signed and continues in force until you become mentally unable to make coherent decisions. It is important to state exactly what authority you are giving your agent. It could be something very specific, like giving your attorney the power to sign a deed of sale for your house while you're on a trip around the world. This is called a "limited power of attorney" and it can be quite common in everyday life.
One common use of it is what is called discretionary money management, or what gives money managers the authority to buy and sell investments on their client's behalf based on their own decisions not their client's. Or you could specify a much broader range of powers, such as access to your bank accounts what's known as a "general power of attorney". A durable POA begins when it is signed but stays in effect for a lifetime unless you initiate the cancellation.
Words in the document should specify that your agent's power should stay in effect even if you become incapacitated.
Durable POAs are popular because the agent can manage affairs easily and inexpensively. This POA comes into play only when a specific event occurs—your incapacitation, for instance. A springing power of attorney must be very carefully crafted to avoid any problems in identifying precisely when the triggering event has happened. A medical POA, or durable power of attorney for healthcare decisions, or health care proxy, is both a durable and a springing POA.
The springing aspect means that the POA takes effect only if specific conditions take place. As long as the principal is conscious, and of sound mind and body, the medical POA will not be triggered.
Some medical POAs are written to end when the principal recovers from the incapacitating condition. You can have different POAs for different situations and appoint different agents to hold them as well. Do not expect your will to serve as a substitute for a power of attorney.
A will designates the distribution of your property after death, while a POA is related to decisions made during your life. However, you can have a living will in addition to a healthcare POA.
A living will usually addresses specific issues and wishes related to medical treatment if you have a terminal condition, or related to dying such as the extent to which lifesaving measures should be used. A better way to start the process of establishing a power of attorney is by locating an attorney who specializes in family law in your state.
If attorney's fees are more than you can afford, legal services offices staffed with credentialed attorneys exist in virtually every part of the United States. Clients who qualify will receive pro bono cost-free assistance. Many states require that the signature of the principal the person who initiates the POA be notarized.
Some states also require that witnesses' signatures be notarized. The following provisos apply generally, nationwide, and everyone who needs to create a POA should be aware of them:. A few key powers cannot be delegated.
These include the authority to do the following:. While the details may differ, the following rules apply coast to coast:.
While some regions of the country accept oral POA grants, verbal instruction is not a reliable substitute for getting each of the powers of attorney granted to your agent spelled out word-for-word on paper.
Written clarity helps to avoid arguments and confusion. Many variations of power of attorney forms exist. Some POAs are short-lived; others are meant to last until death. Decide what powers you wish to grant and prepare a POA specific to that desire. The POA must also satisfy the requirements of your state. To find a form that will be accepted by a court of law in the state in which you live, perform an internet search, check with an office supply store or ask a local estate planning professional to help you.
The best option is to use an attorney. The term for the person granting the POA is the "principal. A POA can be as broad or as limited as the principal wishes. However, each of the powers granted must be clear, even if the principal grants the agent "general power of attorney.
In most states, a power of attorney terminates if the principal is incapacitated. If this happens, the only way an agent can keep their powers is if the POA was written with an indication that it is "durable," a designation that makes it last for the principal's lifetime unless the principal revokes it. Many states require powers of attorney to be notarized.
Not all powers of attorney must be recorded formally by the county to be legal. But recording is standard practice for many estate planners and individuals who want to create a record that the document exists. Some states require specific kinds of POAs to be filed with a court or government office before they can be made valid.
For instance, Ohio requires that any POA used to grant grandparents guardianship over a child must be filed with the juvenile court. It also requires a POA that transfers real estate to be recorded by the county in which the property is located.
Like the property deed for your house or car, a POA grants immense ownership authority, and responsibility. It is a matter of life and death in the case of a medical POA. And you could find yourself facing financial privation or bankruptcy if you end up with a mishandled or abused durable POA. Therefore, you should choose your agent with the greatest care to ensure your wishes are carried out to the greatest extent possible.
It is critical to name a person who is both trustworthy and capable to serve as your agent. This person will act with the same legal authority you would have, so any mistakes made by your agent may be difficult to correct. Even worse, depending on the extent of the powers you grant, there may be a danger for self-dealing. An agent may have access to your bank accounts, the power to make gifts and transfer your funds, and the ability to sell your property.
Your agent can be any competent adult, including a professional such as an attorney, accountant, or banker. But your agent may also be a family member such as a spouse, adult child, or another relative. Parents who create POAs very commonly choose adult children to serve as their agents. When there is more than one child, parents may struggle with the decision of who to select for the role of the agent. This is not a decision to be taken lightly.
Your agent named under your POA acts with your authority, so costly financial mistakes resulting from carelessness or lack of financial understanding may be impossible to fix.
The same is true of acts that create interfamily conflict by favoring some members over others. Children have different characters, skills, and circumstances, and a wise selection of children as agents, and of the powers given to them, can avert these dangers. Consider these three key factors when choosing which child you want to give important powers to under a POA:. Trustworthiness : This is the single most important trait for an agent named under a POA. This includes not just honesty but also reliability in performing tasks that need regular attention, from managing an investment portfolio to paying bills, and diligence in acting according to your wishes.
Abilities of each child : Specific abilities of different children may make them best suited to take on particular roles in managing your financial affairs. These may include the following:. Multiple agents : More than one agent can be named by a POA, either with the authority to act separately or required to act jointly.
Having two children separately authorized to manage routine items can be a convenience if one becomes unavailable for some reason while requiring two to agree on major actions like selling a house can assure family agreement over major decisions. Say one child is a busy financial expert living in a distant city, while another works part-time and lives conveniently close by.
You can have one POA that names the first to manage your investment portfolio and another that names the second to manage your routine daily expenses and pay monthly bills. Naming multiple agents can cause problems if disputes arise between them. For instance, if two children are required to act jointly in managing an investment account but disagree over how to do so, it may be effectively frozen.
So when choosing two children to act jointly as agents under a POA, be sure they have not only the skills for the task but personalities to cooperate. Mistakes—and worse, acts of self-dealing—committed by your agent can be extremely costly. This is especially so with a durable POA that gives broad control over your affairs during a time when you are incapacitated.
You must be convinced that the agent will follow your instructions, can do so, and will pursue your wishes even over the objections of other family members if need be. The powers are far too important to be granted other than on the merits of trustworthiness and ability. Beware of naming a child as your agent if:. Be aware of the dangers of theft and self-dealing created by a POA, even when your agent is your child.
As family circumstances change, periodically review and update the POAs you have created. You can revoke a POA simply by writing a letter that identifies it and states that you revoke it, and delivering the letter to your former agent. Some states require such a letter to be notarized. The unpredictability of life during deployment can mean sudden changes in your plans and your ability to make decisions on your own behalf, whether it's through unavailability, injury, or incapacitation.
Having a power of attorney in place is a good idea for anyone in the military, but for those who are deployed, it can be critical. Once you determine which power of attorney you'll need, you'll need to decide who your agent will be. It's important to remember that any attorney-in-fact is responsible for your best interests and must, to the best of their ability, advocate on your behalf. There are a few steps that can simplify the process of delegating a power of attorney.
You are able to appoint multiple attorneys-in-fact to represent your interests, and you should decide whether these agents must act jointly or separately in making decisions. Multiple agents might be beneficial if your medical or financial affairs are complex.
But having multiple agents can introduce scheduling conflicts to the process and may delay important decisions. Similarly, only having one agent has limitations. You should appoint a backup agent who can step in if the original agent is suddenly unable to execute their duties. Trust is a key factor when choosing an agent for your power of attorney. Whether the agent is a friend, relative, organization, or attorney, you need someone who will look out for your best interests, respect your wishes, and won't abuse the powers granted to them.
Should you, a friend, or relative suspect wrongdoing on the part of your agent, report the suspected abuse to a law enforcement agency and consult a lawyer. It's crucial for an agent to keep accurate records of all transactions done on your behalf and to provide you with periodic updates to keep you informed. If you're unable to review these updates yourself, direct your agent to give an account to a third party that you approve of.
You can appoint multiple agents. You should decide whether these agents must act jointly or separately in making decisions. Multiple agents may ensure more sound decisions, acting as checks and balances against one another.
The downside is that multiple agents can disagree and one person's schedule can potentially delay important transactions or signings of legal documents. If you appoint only one agent, have a backup. Agents can fall ill, be injured, or somehow be unable to serve when the time comes. A successor agent takes over power of attorney duties from the original agent if needed.
Yes, your POA can be disputed. Common reasons are that you weren't competent when you signed it, you were unduly influenced by someone else, or you didn't meet the signing requirements under state law. If your POA doesn't specify requirements for determining mental competency, your agent will still need a written doctor's confirmation of your incompetence in order to do business on your behalf. A court may even be required to decide the competency issue in some circumstances. You can revoke your power of attorney whenever you want, as long as you are mentally competent and follow your state's laws for revocation.
If you recorded your power of attorney at your county recorder's office, you should record the revocation in the same place.
Power of attorney pricing varies based on where you obtain your document from and who helps you complete it. Lawyers will often charge an hourly rate to draft a power of attorney document. Online services typically charge less than attorneys and offer tiers of pricing depending on how much legal assistance you need. A basic power of attorney is a fairly straightforward document that does not require legal assistance. A notary public will also typically charge a small fee to notarize the document, which is mandatory in several states, for it to take effect.
Contents 11 min read. Read more. Family Law Basics. When you sign as someone's power of attorney, you must note that you are legally signing on their behalf. Estate Planning Basics. Because a power of attorney is one of the most important legal documents you can have, it's important to know whether you want a durable or regular power of attorney. When power of attorney is made durable, it remains intact if you cannot make decisions for yourself.
A power of attorney can be a powerful and important document, but it's often misunderstood. By drafting a living trust, designating beneficiaries, and holding property jointly, you may be able to avoid probate. Estate Planning. A durable financial power of attorney can avoid financial disaster in the event you become incapacitated. You can also use a POA to allow someone to transact business for you if you are out of town or otherwise unavailable.
Last Wills. You want to make sure you have all your assets covered, but did you know that not all property can be bequeathed through a last will and testament? A power of attorney allows someone else to handle financial or healthcare matters on your behalf, and California has specific rules about types and requirements. A last will and power of attorney are powerful and important documents that provide you with peace of mind and protect your family.
The executorship of a will comes with a lot of responsibilities and duties. Here are the basics so you'll know what to expect. You can revoke a power of attorney for any number of reasons—even simply because you've changed your mind—but be sure you revoke it correctly and create a new power of attorney if needed. Granting Power of Attorney helps ensure that you and your property are protected if you are incapacitated or otherwise unavailable.
These are the specific requirements for filing in the Keystone State.
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