What Is Power Of Attorney?
The majority of people have heard the term “Power of Attorney”, yet they’re not aware of exactly what it entails. For those who don’t know how to go about utilizing Power of Attorney, my offices help with Power of Attorney matters.
Generally, a Power of Attorney is granted by an individual to an “attorney-in-fact” or an “agent” (a trusted individual). They then have the legal authority to make decisions on behalf of that individual (called the “principal”). The principal sets the limit in regards to how much authority will be given to the agent, and for what specific issues.
Power of Attorney is granted to an attorney-in-fact. They then have the power to make decisions such as:
- Financial decisions
- Gifts of money
- Health care decisions
- Recommend a guardian
An attorney-in-fact can be an individual such as an attorney or a friend and spouse or relative. In all cases the principal should only grant Power of Attorney to the most trusted individuals who will always have that person’s best interest at heart.
The most common types of Power of Attorney include:
- Conventional Power of Attorney begins when the principal signs it, and ends when that person becomes mentally incapacitated.
- Springing Power of Attorney begins only when a specified event begins, such as when the principal becomes incapacitated.
- Durable Power of Attorney begins when signed and remains in effect throughout the principal’s life time, unless cancelled.
There are common misperceptions about a Power of Attorney; First, it is false that a person can sign a Power of Attorney if they are legally incompetent because one must be competent to sign. Second, it is false that a Power of Attorney fallows the attorney-of-fact to do anything they want with an estate. The Attorney-of-fact has a fiduciary obligation to act in the best interest of the principal. The last is that a durable Power of Attorney lasts after death; hence all Powers of Attorney end upon the death of the principal.
I offer the following tips on creating a Power of Attorney:
- Tell loved ones about a Power of Attorney. It’s important to discuss how they’re used, the limitations that could be in place and who will be trusted as the principal. Planning ahead makes a difference later on.
- Hire an attorney. There are various types of Powers of Attorney and various implications for each. Find an attorney (like Kyle Jones) who will listen to your concerns and ensure that you have the best legal solution to your needs.
- Create a circle of advisors of trusted individuals and/or professionals. People who will give you sound advice on how to best manage the principal’s care and needs.
When you contact me for advice on creating a Power of Attorney, I will first listen to your needs and then determine the best course of action with your best interest in mind. I look forward to talking with you!
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