Several valid reasons can require you to create a power of attorney. They can be used if you become incapacitated or unable to handle your affairs. Holding the role of an agent under a power of attorney agreement is one of the most sensitive positions you can hold in law, especially if your principal cannot give informed consent and understand what they are signing. However, the majority of the people lack knowledge regarding Power of Attorney, like the type of POA to be assigned or how to legally grant a POA to someone. But if you are looking for the answers to such questions, you are at the right place.
What is the Power of Attorney (POA)?
A Power of Attorney is granted to someone who can make financial or legal decisions on behalf of another person. For the person granted POA, “agent” or “attorney-in-fact” is used in POA documents. Giving POA to a person has many reasons, like situation or circumstances, including:
1. Incapacitation due to health problems.
2. Getting employed abroad, agents can handle matters back home.
3. Frequent traveling.
4. Being deployed
5. In a profession where incapacitation is possible
6. Senior citizen
Types of Power of Attorney
People who lack knowledge of POA don’t know the various types. So before you grant anyone your POA, you must be aware of the type of POA you are consenting.
There are Four Overarching Types of POA:
1. General Power of Attorney
In this type of POA, an agent has the power to make legal and financial decisions. This also includes signing relevant forms on your behalf. One can grant general POA in traveling or in scenarios where you will not be available temporarily. However, the POA is not valid to the agent in the end-of-life circumstance.
2. Financial Power of Attorney
This type of POA only allows your agent to make financial decisions on your behalf despite your capacity to make sound decisions. Moreover, your agent cannot take any legal decision under the Financial POA on your behalf.
3. Unique or Limited Power of Attorney
This POA is also called LPOA or limited power of attorney. In LPOA, your agent makes certain monetary or legal decisions for you under particular, limited circumstances.
4. Durable Power of Attorney
“Incapacitated” means when you’re declared to be incapable of making decisions. Behind being ruled “Incapacitated” can be various reasons like the unconscious, in a vegetative state, comatose, or having mental impairments. However, durable power of attorney works a little differently. Under this POA, the agent can decide even if incapacitated and healthy.
Choose a (POA) Agent for yourself:
If you want to select someone to be your agent and nominate a power of attorney, you must consider a few questions. These questions will let you decide the best person to become your agent. These questions are:
1. How many people do I want to grant my Power of Attorney?
2. In the event of an emergency, who can remain level-headed?
3. Who do I know has a good understanding of money and finances?
4. Who is the person with sound medical knowledge?
5. Will the person follow my wishes? Or is the person like-minded?
6. Am I choosing this person out of a sense of obligation, or do I want them to oversee crucial financial and legal decisions?
7. Is the person themself in good health for me that they’ll be around?
All you need is to find the answer to these questions, and you will choose the right person to grant your power of attorney to them. While giving power of attorney, one must keep emotions aside.
Giving Your Children Durable POA
One can also consider granting their children a power of attorney if they are adults. You can give them durable power of attorney. However, you are not obligated to do so, and even if you want to consider them, they must have a say in this decision. Your children can be a good choice for granting your power of attorney if you have trust in them to follow your wishes, are level-headed, and most importantly, they do not take decisions based on their inheritance.
5 Steps for granting Durable POA
Durable POA requirements vary by state, and some state laws can be stricter than others. If you find yourself in a dilemma, you can reach out to a local lawyer for assistance. However, there are some basic rules which remain to be universal :
1. Consult to a Financial Advisor, Lawyer
2. Find and Secure Durable Power of Attorney Agent
3. Fill Out a POA Form
4. Sign and Notarize Your Power of Attorney Form
5. POA Forms must be kept Safe
How to Revoke POA:
When we talk about POA, only granting is not enough. In some unfavorable conditions or circumstances, you can also revoke the POA. For instance, if your agent has died, ruled to be incapable of holding the POA, or maybe you’re no longer interested in granting the POA to your agent, then, in that case, you can revoke the POA.
These are steps for changing or revoking POA:
- Decide what changes you wish to make in your POA.
- Prepare the revised paperwork.
- Submit a Revocation of Power of Attorney form or Notice of Revocation.
- Update all involved parties about the revocation.
- At the end, you can submit the new POA form.
This was a brief about the Power of Attorney (POA) and what exactly it is. Choosing your power of attorney is not a difficult task. Choose someone you trust implicitly and make sure they understand the role they are taking on before you sign the document. If you follow these practical tips, you will significantly reduce the likelihood of a legal complication arising from your POA.