Many people experience situations in life where they are unable to make rational decisions on their own behalf. Injuries can render a person unconscious, or anesthesia or sedation may be necessary as part of a medical procedure. How can a person protect their legal, financial, and even medical rights in those situations? An effective tool commonly used is a power of attorney (POA).
A POA is a legally valid document that authorizes a named person (referred to as an “agent” or “attorney-in-fact”) to act on behalf of the person granting the authority (the “principal”).
To create a POA, you need to prepare a written document that complies with the specific legal requirements in your state. Before you do that, however, you should identify who you want to act on your behalf, as well as who you want as a contingent POA, should your first choice not be available when needed. You will also want to determine the extent of the POA. Will it apply only to certain types of decisions, such as medical or financial concerns? Or will it be a broad, general POA that allows the agent to make all decisions that affect you?
It’s a good idea to retain an attorney to prepare your POA form, someone well versed in the applicable laws in your state. Once you have the form drafted, review it with the person to whom you’re granting the POA, so they know what their rights and responsibilities will be. Make certain that you comply with all state requirements when you sign and execute the form.
A POA is a written legal document that identifies the:
As a general rule, a POA must be in writing and must:
A POA generally works in one of two ways:
There are several different ways to identify POAs:
When you grant POA to another person, you want them to make decisions that are in your best interests and consistent with your wishes. Unless you want to spend a lot of time and money setting forth the precise limitations of their powers, you want someone you can trust. You also want someone that you know will be available and accessible when needed and who will have the capacity to make the decisions that will arise.
There’s nothing to prohibit you from granting authority to more than one person to act as co-agents under a POA, but it’s generally not advisable to do so. Though you may get the benefit of checks and balances, you also create the potential for conflict. It’s a better idea to choose someone you trust and make certain they understand your wishes. You should always, though, select an alternate agent or attorney-in-fact to hold the POA in the event your primary agent is unavailable.
The circumstances that terminate a POA vary, based on the type of POA. With a springing POA, the authority is typically revoked or terminated when the conditions that led to the original transfer of authority no longer exist. For example, if the POA went into effect because you were declared incapacitated, it will be suspended if you are subsequently deemed to have full capacity.
A POA may identify other situations where it will terminate—after a period of time, for example. With a durable POA with no termination date, the principal can execute a “Revocation of Power of Attorney” to render the original POA invalid.
A POA can provide significant protection when you are unable to make your own decisions, allowing you to give another person the authority to act on your behalf. You can create a general POA, allowing a person to make all decisions for you, or you can execute a special POA, limiting those decisions to specific concerns, such as legal, medical, or financial issues.
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