POWER OF ATTORNEY
WHAT IS A POWER OF ATTORNEY?
A Power of Attorney (POA) is a legal document that allows an individual (the "principal") to appoint another person (the "agent" or "attorney-in-fact") to make decisions and act on their behalf. The powers granted can be broad or limited to specific tasks, depending on the principal's needs and preferences. POAs are crucial for ensuring that someone's personal, financial, or medical affairs are managed according to their wishes if they become unable to do so themselves.
TYPES OF POWERS OF ATTORNEY
Durable Power of Attorney
Description: Remains effective even if the principal becomes incapacitated.
When to Use: Ideal for long-term planning, ensuring continuous management of affairs if the principal becomes unable to make decisions due to illness or disability.
​
Non-Durable Power of Attorney
Description: Effective immediately upon signing but becomes void if the principal becomes incapacitated.
When to Use:Suitable for temporary situations where the principal needs someone to handle specific tasks or transactions for a limited period.
​
Springing Power of Attorney
Description: Becomes effective only when a specified event occurs, typically the incapacitation of the principal.
When to Use: Useful for those who want to maintain control over their affairs until they are unable to make decisions themselves.
​
Medical Power of Attorney
Description: Grants the agent authority to make healthcare decisions on behalf of the principal.
When to Use: Essential for ensuring that medical treatment aligns with the principal’s wishes when they cannot communicate their preferences.
​
Financial Power of Attorney
Description: Allows the agent to manage the principal’s financial affairs, including banking, real estate transactions, and investments.
When to Use: Ideal for ensuring that financial matters are handled appropriately, especially in situations where the principal is unavailable or incapacitated.
​
Limited (or Special) Power of Attorney
Description: Grants the agent authority to perform specific tasks or make decisions in a particular area.
When to Use:Suitable for authorizing someone to handle a specific transaction, such as selling a property or managing a particular investment.
BENEFITS OF A POWER OF ATTORNEY
Control and Flexibility
-
Control: Allows individuals to specify who will make decisions and the extent of their authority.
-
Flexibility: Can be tailored to cover a broad range of decisions or be limited to specific tasks.
​
Peace of Mind
-
For the Principal: Knowing that a trusted person is empowered to manage affairs if they are unable to do so.
-
For Loved Ones: Reduces the stress and uncertainty that can arise if a principal becomes incapacitated without a plan in place.
​
Avoids Legal Complications
-
Preventive Measure: Helps avoid the need for court-appointed guardianship, which can be time-consuming and costly.
-
Clarity: Provides clear guidance and authority, reducing the risk of disputes among family members or third parties.
LEGAL REQUIREMENTS
Legal Capacity
-
Age and Mental Capacity: The individual must be at least 18 years old and of sound mind to create a living will.
​
Written Document
-
Documentation: POA must be in writing, detailing the individual’s preferences for life-sustaining treatments in situations of terminal illness or permanent unconsciousness.
​
Signature and Witnesses
-
Signatures: The document must be signed by the individual creating the POA.
-
Witnesses: It must be witnessed by at least two adult witnesses who are not related to the individual and who do not have a financial interest in the individual’s estate or healthcare.
​
Notarization
-
While notarization is not required for all POAs, it is strongly recommended, especially for financial POAs to ensure its acceptance by third parties and companies.