What is a Power of Attorney?
It is an excellent idea to have a valid Power of Attorney, one of the most important legal documents an individual can have. A Power of Attorney designates another person to be able to perform any act that they may themselves perform as if they were present to do so. A Power of Attorney can also be prepared to assist someone with regard to just a specific matter, i.e. Power of Attorney to sign legal documents for them when they cannot be present at a closing on a sale of a house, a Power of Attorney to take their children to the doctor because they are out of town, etc.
Powers of Attorney can be given for a specific period of time, although they are generally not set up in that manner. One example of a Power of Attorney that expires at a specific time is a parent designating another family member to take their children to the doctor and make medical decisions when they are out of town for two weeks. Setting up a legal Power of Attorney should be done through an attorney to ensure that it is set up properly and is enforceable under the laws of the jurisdiction.
When to Appoint a Power of Attorney
Below are some common reasons why an individual may want a POA:
- To manage your personal and/or business needs if you become sick, disabled, or incapacitated.
- To manage your financial responsibilities while you are away (vacation, military obligation, incarceration, etc.).
- To manage your financial responsibilities because you simply do not want to do so.
NOTE: Most Powers of Attorney are designed to stay “durable,” which means that the document stays active even if you later become incapacitated. Also, a Power of Attorney agent can act on your behalf with third parties, such as credit card companies, utility companies, etc. Most often, a Power of Attorney agent will need to provide Proof of the recorded Power of Attorney before communicating and/or dealing with another company or individual.
A serious problem that occurs is when an individual needs a Power of Attorney to assist someone with their affairs, i.e. an aged relative who is incapacitated, has Alzheimer’s, or who is incompetent, and they do not have a Power of Attorney on behalf of that person. The person giving the Power of Attorney to another to be their agent must be competent to do so. They must understand what they are doing when they execute the document. For this critical reason, it is recommended that everyone have a Power of Attorney, including young people. For example, if you are young and are involved in an automobile accident or suffer an injury in which you are not able to mentally give consent under a Power of Attorney, then no one would be able to access your bank account to help you pay your bills while you are recovering.
There are courses of action that you can take against the agent if the Power of Attorney agent takes action that is not in the best interest of the person giving the Power of Attorney.