What is a Power of Attorney?
Do you wonder what a Power of Attorney is and where you can use one? A legal document allows a principal to appoint an agent who should act for them if they become incapacitated. The agent is expected to prioritize the principal’s interests ahead of their own, so it is essential to choose a trusted individual as an agent to benefit both you and your loved ones.
If the principal is incapacitated because of an illness or disability, a power of attorney occurs. The agent may act on behalf of the principal if they cannot sign any financial or legal transactions.
The power of attorney lapses and becomes void when the creator dies, when he revokes the legal document, or when the court of law has invalidated it. It also ends the moment the creator divorces a spouse in charge with a power of attorney or when the appointed agent can no longer carry out his duties.
Why do I Need A Power of Attorney?
Now that you know the answer to what is a Power of Attorney, you may have a vague idea of what you will need it for.
Well, many unexpected things may happen to you in your lifetime. You can become seriously ill, injured, or disabled. If any of these things happen, it may be difficult for you to manage your everyday affairs, such as paying bills and agreeing to or declining medical treatment.
If you do not have a power of attorney, your loved ones have to ask permission from the court to act on your behalf. However, doing this may take a while to be processed. Sometimes, the person appointed by the court doesn’t know what you want or isn’t the person you would have chosen.
By establishing a power of attorney ahead of time, you have the opportunity to plan and ensure that the person who will act on your behalf is someone who knows you and is someone you trust.
4 Types of Power of Attorney
1. General Power of Attorney
It is a broad mandate that gives an agent the power to handle the principal’s affairs. The agent shall act on the principal’s behalf when they cannot conduct any tasks because of sickness or disability. Buying or disposing of real estate or entering into a contractual relationship on the principal’s behalf are a few powers entrusted to the agent.
2. Limited or Special Power of Attorney
If you are an individual that wants to limit how much the agent can do, then you should probably choose limited or special power of attorney. It gives your agent authority to act on your behalf but only in certain areas, such as collecting your retirement benefit or selling off a real estate property.
3. Durable Power of Attorney
The durable power of attorney means that the agent’s authority to act on your behalf will continue even if you become incapacitated. This type is mainly used for estate planning when an important decision is to be made, but you can’t make them yourself.
On the other hand, a non-durable power of attorney will end when the principal becomes incapacitated or when the specified expiration date arrives.
4. Medical or Healthcare Power of Attorney
If the principal becomes seriously ill, the medical or healthcare power of attorney gives an authority to the agent to make decisions on the principal’s behalf in case of a life-threatening illness. This kind of legal document usually falls on the durable power of attorney because they consider that the principal might be too sick to decide on their own.
In choosing an agent for this POA, you should seek counsel first before you decide. It is best to have a counsel who will guide you throughout the notarizing process to make sure that you understand what should be in the document.
How to Create a Power of Attorney?
- Decide which type of power of attorney you want to make. It should depend on the situation and your preference.
- Decide on who you want your agent to be. Anyone with a sound mind and at least 18 years of age can qualify, but they should be someone you know will act in your best interest if the time comes that you can’t because they’ll have a lot of authority. Talk to them beforehand about your plan and make sure they are willing to serve as an agent.
- Decide on what authority you want to give your agent. What medical or financial decisions do you want them to manage and be responsible for on your behalf?
- Get a power of attorney form. There are blank POA forms in most states, but they aren’t easy to tailor to your needs. You can use free online software to create a durable financial power of attorney or a living will that includes a health care power of attorney.
- Complete the form, sign, and witness it according to your state laws. In most states, signing your POA form should be done in front of a notary, while some states require an additional witness or the signature of your agent.
- Once done, give a copy of your POA form to your agent and other parties interested in this legal document, including your bank and medical office
- Keep your POA forms in a safe place and your estate planning documents. You can put it in a safety deposit box, a fireproof safe in your home, or in a trusted attorney’s office.
- Update your POA as soon as your circumstances change.
Power of Attorney Gives You Freedom from Worry
Planning for a situation where you need a power of attorney might be uncomfortable for some. But, now that you know the answer to what is a Power of Attorney and how they can be helpful to you, you can become more open to preparing for uncertainties in the future.
Warner and Warner can help you with your legal needs. Our lawyers are the best personal injury attorneys in Central Florida. Call us at (321) 341-6887 and get a free case review.