Power of Attorney
Granting Power of Attorney rights to a person is common practice in the field of estate planning. These powers give a person authority to make financial and healthcare decisions on your behalf when you are unable to do so.
Before assigning Power of Attorney rights it's important to give careful consideration to the person who will become your voice. The representative may have to make very difficult decisions, some of which conflict with ideals of relatives.
With the being said, the designated POA should be of legal age and capable of making sound decisions under distress. They need to be responsible enough to stand up for requests you have made regarding financial transactions or healthcare decisions.
POA duties vary by the type of powers granted. There are five types of Power of Attorney designations. Each transfers authority from the 'Principal', the person who executes the document, to the 'attorney-at-fact', the person who acts on behalf of the Principal.
Durable Power of Attorney is the most common POA and authorizes the designated agent to make decisions while the Grantor is incapacitated. Powers can be extended up until the Grantor passes away by evoking a Power of Attorney with Durable Provisions.
Non-Durable Power of Attorney is used to authorize the attorney-at-fact to engage in short-term transactions. This type of document might be required if a person is undergoing some type of medical treatment that prevents them from being able to make good decisions, or if the Principal is experiencing health or mental problems.
Non-Durable POA rights expires once the Principal is able to make sound decisions. This type of contract is limited to a specific timeframe and usually only applies to one specific transaction.
Special or Limited Power of Attorney is used in conjunction with non-durable POA to grant the attorney-at-fact with limited or special powers for a specific reason. This is often used to grant authority to sell or transfer real estate.
Under Limited Power of Attorney, the representative is only authorized to engage in the specific transaction. Once the transaction is complete POA rights are revoked.
Health Care Power of Attorney grants authority to the attorney-at-fact to make medical decisions on behalf of the Principal. It is vital to put healthcare choices in writing and talk to the attorney-at-fact about what types of life-saving medical treatment you do or do not want if you cannot make decisions for yourself.
If you are pronounced brain dead and do not want to remain on life support, this needs to be openly discussed with the person who will be in charge of making decisions. Most people would rather not think about these matters, but it is better to be prepared and make decisions ahead of time should the unthinkable happen.
Springing Power of Attorney authorizes the attorney-at-fact to act on behalf of the Principal if they become incapable of making decisions due to injury or illness. This document must include provisions that authorize healthcare providers to release medical records to the attorney-at-fact.
Springing POA is more involved than other types of Power of Attorney. The designated attorney-at-fact will need to be authorized through the court before making decisions on behalf of the Principal.
Prior to executing Power of Attorney forms it is sensible to obtain advice from a probate attorney or estate planner. Setting up POA is a relatively easy process, but choosing the attorney-at-fact requires careful consideration.
We encourage you to spend time reviewing our estate planning article library to learn strategies for protecting inheritance property and reviewing available estate planning strategies. We invite you to subscribe to our mailing list to receive notification of newly published articles.
Published on July 27, 2011 at 02:45 AM | Comments: 1
| | Printer friendly