What is Power of Attorney? (And Why Have One)?
Without a doubt, life can be unpredictable. A power of attorney is a document that allows you to designate another party to make decisions on your behalf.
The person or organization you assign is known as an attorney-in-fact or agent. You give Power of Attorney (POA) to somebody who you (the principal) can trust completely. When you give someone a POA, you give them immense power over how your money is spent. Therefore, it is very critical that you choose the correct people.
The chosen agent can have extensive or limited power to make decisions about your property, finances, or medical care, based on the POA terms. He or she will take full responsibility for the decisions made under the document’s guidelines. Moreover, the person may be required to keep a record of the monetary transactions or healthcare choices.
Anybody can be issued with a power of attorney, including a spouse, best friend, or family member. However, providing a person with POA can make it easy for them to misuse authority if the principle is not in their right state of mind to make decisions.
What Does POA Do?
There are several reasons why somebody would want to get power of attorney, including:
- Managing financial matters.
- Purchasing life insurance.
- Handling claims.
- Managing business interests.
- Guarding or claiming personal or real estate assets.
- Making medical decisions, such as the ability to withhold or halt medical procedures or treatments.
Overall, a POA can be as extensive or specific as you want it to be. It can be limited to financial or healthcare choices, for instance. A financial POA is a document that provides someone else with authority to manage the business on your behalf. Medical POA gives people the ability to make choices for you, typically when you aren’t in a capacity to do so yourself.
Why Is Power of Attorney Necessary?
Getting a POA is ideal if you don’t want your property to end up in the wrong hands. Sometimes, you might not be able to manage your personal affairs because of many reasons, e.g., working overseas or being on life-support. In such a case, it is helpful to have a power of attorney to make sure your will is done. If the POA involves healthcare decisions, it’s wise to have a doctor involved in the matter.
How Can You Get Power of Attorney?
The first step in the process is to contact a qualified lawyer. There are specific requirements for getting a POA for mentally unstable adults or underage children that would need a doctor’s signature.
The legal document goes into effect once the parties have signed. If you happen to relocate to another state, remember to consult a lawyer to make sure the agreement is still valid.
Verdict
Before you give power of attorney, confirm that you’ve chosen the right person, and have a lawyer to properly draft these documents. For more information, contact one of our estate planning attorneys at The Matter Firm today.