What Is a Power of Attorney?
A power of attorney is a legal document that allows you to appoint an individual or organization to act on your behalf in financial matters. The person acting for you via the POA is called the “attorney-in-fact.”
Let me explain,
For example, you may be sick and unable to handle your financial affairs. You can appoint a family member or friend as your attorney-in-fact so that they can pay bills for you and more until you’ve recovered from an illness.
What Are Some Ways I Can Give My Attorney Power?
There are many ways to grant power, but only one way grants them full authority over all your affairs – known as general powers.
You can give limited power by specifying certain activities they may perform (such as paying bills). Without this specification, there would be no limit on their authority.
It would become what’s known as special or plenary power. Some specific types of transactions require court approval, including selling property, making more than simple investments, or managing business affairs.
You can also include a broad range of transactions in your power of attorney to give them great discretion over what they are allowed to do on your behalf. However, this will make it difficult for you to enforce the terms yourself if there is ever a conflict between you and the person acting as POA.
What Are My Rights When I Give Someone Power?
The main rights that everyone has when giving someone power are: knowing exactly who has authority over their finances; having detailed information about how much money is available at any given time (so that no one can take advantage); being able to access all relevant records easily; deciding which bank accounts/investments properties etc. should be used; making sure bills get paid in a timely fashion; not having to worry about someone taking advantage of them, using their money inappropriately or wasting it.
What Can’t I Do with Power?
With power comes great responsibility, so you should think twice before giving anyone power! Your attorney-in-fact is liable for any dishonest act they perform on your behalf.
For example, if the POA sells something without consulting you first and then pockets the money, that would be considered theft. Also, note that some activities require court approval.
Suppose someone abuses their authority over your finances by committing fraud. In that case, this could result in criminal charges against them, even if it was done while acting under an authorized power of attorney.
What Types of Powers of Attorney Are There?
There are two types of Power of Attorney: Ordinary and Lasting.
An ordinary power of attorney is one that you sign while competent. It gives the POA authority to act for your benefit until either (a) you revoke it or (b) you die, whichever comes first.
A lasting power of attorney (LPA1) takes effect only after an event has occurred, which makes someone unable to manage their affairs – they become incapacitated. This can happen suddenly through illness or accident. Still, sometimes people make plans in advance and include a Lasting Power of Attorney document with other estate planning documents like wills or trusts.
What Happens If I Don’t Have a Power of Attorney?
If you become incapacitated, your family would have to go through a court procedure called Guardianship. This process can be expensive and time-consuming, especially if the person acting as POA has misused their authority or failed to act responsibly on your behalf.
Can I Choose Anyone To Be My Attorney?
Yes! This individual must know about financial matters because they will be responsible for paying bills on your behalf, handling bank accounts, etc. It would be best if you chose someone who listens carefully when you are speaking (and doesn’t always assume they know what’s best) but also somebody whom you completely trust with money matters.
If the attorney-in-fact isn’t trustworthy, then there could be serious consequences – including criminal charges of fraud or theft.
When Should I Make a Power of Attorney?
It would help if you made a power of attorney when you are fully aware of your situation. You’ll need to think about all aspects, including the type, length, and what it covers – ordinary or lasting if possible get legal advice before signing any documents so that you understand exactly what they mean!
What Happens if I Change My Mind?
If you revoke an ordinary POA, this becomes effective immediately unless someone else has already acted under it (in which case their authority comes to an end). A revoking instrument can be informal but must be in writing and signed by the person giving up power.
An example might include scribbling across the original document “I at this moment revoke my Power of Attorney” handwritten on each page, dating it, signing the last page, and then getting your POA to witness this.
You can also change the power of attorney. Still, you need to revoke the original document first before making new arrangements properly. If you don’t do this (and somebody acts under an old POA), they could be liable for any losses as a result!
- Last will- this is a legal document that you use to specify how your assets will be distributed when you die.
- Trust2– A trust can also help people protect their interests. It comes in two forms: living trusts and testamentary trusts, which take effect only after someone dies.
- Healthcare Directive -this allows patients to appoint somebody they trust (ideally, this should be the same person who has been named as POA) so that decisions about medical care are made by an individual whom they desire rather than one chosen by others such as family members or hospital staff because of lack of knowledge about their wishes. It gives clear instructions on what type of treatment/nursing home/etc. You want if ever faced with serious illness or injury while not capable of making decisions for yourself.
- Revocation of Power of Attorney- This document is used to cancel the POA agreement formally. It must be in writing and signed by you, stating that you revoke all previous powers of attorney.
What Is the Difference Between a General Power of Attorney and a Durable Power of Attorney?
A General POA is only effective while you are still capable of managing your affairs and ends when a doctor declares that you have lost mental capacity. A Durable Power of Attorney remains in full force even after the power holder has been declared incapacitated. It can be used to pay bills, manage bank accounts, etc., on behalf of individuals who can no longer manage their affairs.
Can a POA Make Medical Decisions?
No! A power of attorney has no legal right to make medical decisions for an individual. It can only express the patient’s wishes in financial and property matters such as paying bills or selling a car but not when it comes to healthcare. This requires specific documentation that doctors must carry out, nurses, and other health professionals.
What Are the Limits of a Power of Attorney?
A POA only covers the financial affairs of an individual, not their health care. This means that you can make decisions about selling your house or cashing in savings. Still, suppose it’s a matter of medical treatment. In that case, this needs to be done by doctors and nurses who will also need specific documentation signed by the patient themselves because they can do so.
What Is the Most Powerful Power of Attorney?
A Lasting Power of Attorney (LPA) is the most powerful type because it continues to be effective no matter what happens in the future. In contrast, an ordinary POA only remains valid during your lifetime. An LPA can also make decisions on behalf of someone who loses mental capacity. This will remain legal even if you move abroad or change your name.
Don’t just take my word for it,
There are many benefits of having a power of attorney, including avoiding the need to go through Guardianship, reducing stress for your loved ones, and making sure you have someone trustworthy who will act on your behalf when needed.
This individual must know about financial matters because they will be responsible for paying bills on your behalf, handling bank accounts, etc.
It would help if you chose someone who listens carefully when you are speaking (and doesn’t always assume they know what’s best) and somebody you completely trust with money matters. If the attorney-in-fact isn’t trustworthy, then there could be serious consequences – including criminal charges of fraud or theft.