When and Why Might I Need a Power of Attorney?
A power of attorney (or “POA”) can be a very handy document when someone—whether ill, out of town or otherwise indisposed or preoccupied—is personally unable to perform some transactions, such as banking; buying, selling or managing real property or a business; managing a financial account, such as a brokerage account; making necessary expenditures for maintenance, medical care, food, clothing, education and the like for the care of children or other dependents.
A power of attorney involves at least two parties: (1) a principal (i.e., the one granting the power, or authorization), and (2) an agent, or attorney-in-fact, who is granted the authorization and acts on behalf of the principal.
There are four different forms of power of attorney: (a) the general and (b) the limited or specific; also, (c) the ordinary or (d) the durable.
The first two represent the scope of the authorization: The general power of attorney grants the agent authority to act on behalf of the principal in connection with any action the principal could take, while the limited power of attorney authorizes only one or a few specified actions.
The second two have to do with the length of time the POA is effective: The ordinary POA will last as long as the agent is available or until either it is revoked, or the principal becomes mentally incapacitated. The durable POA continues in effect even after the principle becomes incapacitated and runs until either he or she dies, or the agent is removed by a court. In either case—except in the case of incapacity—the principal does not give up his or her authority, even though he or she has granted it to the agent.
In order to legally qualify as an attorney-in-fact, the agent must have reached the age of maturity (which is 18 years of age or older, in most states).
At any time, as long as he or she is capacitated, the principal can revoke (i.e., terminate) the POA.
The POA is one of a number of life-planning documents, and it is probably the simplest, in that it deals immediately with getting things done while the principal is living in good health.
There are other, similar forms related to life planning which call for the appointment of an agent with regard to matters in the event of illness or death.
A Living Will or Health Care Power of Attorney provides instructions with respect to how one wishes to be treated by physicians and health care providers in the event of an illness or hospitalization.
A Last Will and Testament appoints one or more agents, known as executors or personal representatives, and provides instructions as to how assets, debts, properties and possessions are to be distributed upon the principal’s death.
A Codicil is a document that enables the principle, later on, to make amendments to the Last Will and Testament.
A Trust is a document in which the principal transfers his or her property to one or more agents, or trustees, and provides instructions on how such property is to be managed and, ultimately, distributed to one or more survivors.
A power of attorney involves at least two parties: (1) a principal (i.e., the one granting the power, or authorization), and (2) an agent, or attorney-in-fact, who is granted the authorization and acts on behalf of the principal.
There are four different forms of power of attorney: (a) the general and (b) the limited or specific; also, (c) the ordinary or (d) the durable.
The first two represent the scope of the authorization: The general power of attorney grants the agent authority to act on behalf of the principal in connection with any action the principal could take, while the limited power of attorney authorizes only one or a few specified actions.
The second two have to do with the length of time the POA is effective: The ordinary POA will last as long as the agent is available or until either it is revoked, or the principal becomes mentally incapacitated. The durable POA continues in effect even after the principle becomes incapacitated and runs until either he or she dies, or the agent is removed by a court. In either case—except in the case of incapacity—the principal does not give up his or her authority, even though he or she has granted it to the agent.
In order to legally qualify as an attorney-in-fact, the agent must have reached the age of maturity (which is 18 years of age or older, in most states).
At any time, as long as he or she is capacitated, the principal can revoke (i.e., terminate) the POA.
The POA is one of a number of life-planning documents, and it is probably the simplest, in that it deals immediately with getting things done while the principal is living in good health.
There are other, similar forms related to life planning which call for the appointment of an agent with regard to matters in the event of illness or death.
A Living Will or Health Care Power of Attorney provides instructions with respect to how one wishes to be treated by physicians and health care providers in the event of an illness or hospitalization.
A Last Will and Testament appoints one or more agents, known as executors or personal representatives, and provides instructions as to how assets, debts, properties and possessions are to be distributed upon the principal’s death.
A Codicil is a document that enables the principle, later on, to make amendments to the Last Will and Testament.
A Trust is a document in which the principal transfers his or her property to one or more agents, or trustees, and provides instructions on how such property is to be managed and, ultimately, distributed to one or more survivors.