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What Is a Power of Attorney?

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A power of attorney is an important document. It is, nevertheless, frequently disregarded in estate planning. People usually concentrate their efforts on their wills and trusts, naming a power of attorney at the last minute.

Any responsible adult can act as your agent. This is an important decision that shouldn’t be handled lightly.

A power of attorney or “POA” is a legal document that authorizes a trusted person (the “agent” or “attorney-in-fact”) to make decisions on your behalf (the “donor” or “grantor”).

The authority can be broad, or it can be narrow for only specific actions.

There are two basic types of powers of attorney: one for finances and another for medical decisions.

A financial POA provides your agent with the authority to make financial and property decisions on your behalf. This may include handling your bank or investment accounts, collecting a pension or benefits, paying bills, or selling your house.  You can set it up to be used right away or to make it applicable after you lose your mental capacity.

A medical POA, often referred to as a Health Care Proxy, lets your agent make decisions about your medical care and placement in a care facility, including life-sustaining medical care. It should only be used if you’re incapable of making your own decisions, and you must agree to it while you are still capable of doing so.

These specifics may vary, but the following are general guidelines that typically apply:

  • Write it down
  • Determine the parties
  • Delegate the authority
  • Define the term “durability”; and
  • Get the POA witnessed and notarized.

Appoint a person as your representative who’s both trustworthy and capable.  It is important to consult an experienced Estate Planning Attorney to guide you when drafting a Power of Attorney.

 

Suggested Key Terms: Elder Law Attorney, Estate Planning, Power of Attorney, Advance Directive