At some point you’ve likely heard the phrase “Power of Attorney,”
but what does it really mean? A power of attorney (POA) is a legal instrument that give another person
legal authority to make decisions on an individual’s behalf if they
are physically incapacitated or mentally incompetent. The individual chosen
to act on the individual’s behalf is referred to as an “agent.”
Why do I need one? Well, because life happens. An accident, long-term illness, or unexpected
absence out of the country can occur at any time and a POA can assist
your loved ones in carrying on in your absence. Yes, it’s difficult
to think about, but if something happens to you, what happens to your
assets or your loved ones? By having a POA created ahead of time, an unexpected
event won’t cause legal hardship and the appointed agent can carry
on with their responsibilities.
How does it work? When a POA is granted, the authorized agent is legally responsible for
making decisions on behalf of the grantor in a number of legal matters.
There are also different types of Powers of Attorney that can be enforced
based on the type decision being made.
What are my options? A
nondurable Power of Attorney often comes into play in real estate transactions, or
when someone elects to delegate their financial affairs to an agent during
an extended absence. However, a nondurable POA is limited in time, scope
durable Power of Attorney allows another party or appointed agent, to make decisions
and act on an individual’s behalf for financial affairs and/or health
care decisions until that authority is revoked. You can revoke your power
of attorney by specifying an expiration date on the document. Financially,
a POA is exceedingly useful. The agent can pay bills, write checks, make
investment decisions, file taxes, buy or sell real estate and other hard
assets. In addition, the agent has authority to arrange the distribution
of your retirement benefits.
Healthcare Power of Attorney also known as a “healthcare proxy,” is combined
with a Living Will that allows a designated agent to make certain decisions
regarding medical issues should that individual become incapacitated or
mentally incompetent. The Healthcare POA also sets forth guidance to both
the designated agent and the individual’s medical providers as to
what the individual’s wishes are pertaining to the level of care
they want, especially if they are suffering from a terminal illness, coma,
or persistent vegetative state.