Power of Attorney Information
A Power of Attorney is also known as:
- Letter of Attorney
- Financial Power of Attorney
- Legal Power-of-Attorney
What is a Power of Attorney?
A Power of Attorney form allows you to appoint another person to act on your behalf should you ever require someone to make short- or long-term decisions for you.
On a Power of Attorney form, the person granting authority to another is the "Principal". The person who is granted authority is called the "Attorney-in-fact" or "Agent".
Powers You Can Grant Your Attorney-in-Fact
A Power of Attorney document allows you to choose what your personal representative, or attorney-in-fact, will be responsible for by designating certain powers to them. The powers that you can grant your attorney-in-fact include:
Real Estate: To buy, sell, rent, or otherwise manage residential, commercial, and personal real estate.
Business: To invest, trade, and manage any and all business transactions and decisions, as well as handle any claim or litigation matters.
Finance: To control banking, tax, and government and retirement transactions, as well as living trust and estate decisions. Financial powers also allows your representative to control personal insurance policies and to continue donating to any charities in your stead.
Family: To purchase gifts, employ professionals, and to buy, sell or trade any of your personal property.
General Authority: This grants your personal attorney the authority to make any decisions that you would be able to if you were personally present.
When You Should Have a Power of Attorney Form
You should consider having a POA if:
- You travel out of the country often
- You are employed in a hazardous work environment
- You have been diagnosed with a serious illness
- You have business or property that you would want maintained if you were unavailable
- You have children that would need to be provided for if you were to become incapacitated
- You want a specific person to be responsible for your affairs
- You have rules about how you run your business, property, or life, and you want to ensure they are upheld
- You are approaching old age and would like to designate a representative for yourself
Types of Power of Attorney Forms
General: A general Power of Attorney form allows your representative to manage all of your property-based and financial affairs. This type of POA grants them general authority.
Specific: A specific Power of Attorney form limits your representative's responsibilities to certain types of decisions. You can choose to allow someone to only make decisions in relation to business, for example.
Ordinary: An ordinary Power of Attorney is only valid while you, the principal, are capable of making decisions. This type of POA becomes invalid in the event that you become incapacitated.
Durable: An enduring Power of Attorney is when the contract continues even if you, the principal, become incapacitated.
Choosing an Attorney-in-Fact
To choose an attorney-in-fact, you must consider your options carefully. Aside from your personal preferences, there are also legal requirements for who you select.
Your attorney-in-fact may not:
- Be under the age of majority in your state
- Currently be in a state of bankruptcy
- Be the owner or employee of a care home where the principal resides or receives treatment
You can name more than one attorney-in-fact if you believe that different people will better handle certain decisions or transactions.
You may also name a fiduciary, such as an accountant, lawyer, or other professional as your attorney-in-fact if you wish.
Forms Related to a Power of Attorney: