Your life can change quickly. It’s one of the reasons why you should have a last will and testament. Sometimes, the unpredictable happens. If you’re in a situation where you can’t make an important decision, having a power of attorney, someone whom you trust to make the decision for you, can help.
Planning out and naming a power of attorney can simplify things should certain occasions arise. It can also give you comfort in knowing that, no matter what, somebody who should have your best interests in mind will be the one making decisions on your behalf if you can’t make them yourself.
What Does Power of Attorney Entail?
Powers of attorney, also called attorneys-in-fact for financial agreements or health care proxies or agents for medical situations, are legally able to make decisions for you. This can be useful if you’re incapacitated or otherwise unable to make the decisions on your own.
When you give someone power of attorney, you’re allowing them to make decisions in your place. You, the person giving power of attorney, are legally designated the principal. The actions made on the principal’s behalf by someone with power of attorney are legally the actions of the principal. If you give power of attorney, this does not necessarily take power away from you. As the principal, you may still be able to make your own decisions.
If you give power of attorney, you can still make your own decisions. It allows your agent also to make decisions in your place.
An attorney-in-fact may have limited power (as with a “special” power of attorney) or control over most of your personal and financial matters (as with a “general” power of attorney). It’s important to note that, depending on the agreement, power of attorney can take effect immediately after you sign the forms or at a future time when you’re unable to make important choices yourself. Normally, being “unable” to make important choices on your own means you’re incapacitated or unconscious, but it may mean you’re out of the country. You can have when the power of attorney takes effect drafted into your agreement.
The Differing Types of Powers of Attorney
There are several types of powers of attorney, the differences of which are important to know. The two most basic types of powers of attorney are general and special or limited. A general power of attorney is largely able to make personal and financial decisions only (e.g., estate planning). A special or limited power of attorney is usually able to make a single decision for the principal, such as a property or other financial deal. Their powers are outlined in a (hopefully custom-written) power of attorney form.
There are several different types of powers of attorney: general and special power of attorney and durable and non-durable power of attorney.
General or limited powers of attorney can be durable or non-durable. Durable power of attorney relates to a power of attorney who can make decisions when the principal is incapacitated. A non-durable power of attorney becomes invalid when the principal becomes mentally unfit or incapable. The durable power of attorney usually becomes active the moment the form’s signed. To delay durable power of attorney until the principal is incapacitated, the principal can sign a springing power of attorney. A springing power of attorney becomes active due to a specific event.
A health care proxy, or medical power of attorney, is a special type of durable power of attorney who is legally required to follow the principal’s predetermined treatment preferences. These preferences should be included in a living will or health care declaration. Some states combine durable power of attorney and living wills into a single document called an advance health care directive.
Who Can Have Power of Attorney
If you’re in need of an attorney-in-fact, you have many options. There are only a few eligibility requirements for whom can be given power of attorney. They must be over the age of 18, able to make informed decisions, and able to understand the consequences of those decisions. They may be disqualified if there are any conflicts of interest, are currently in undischarged bankruptcy, or were convicted of certain crimes within the last ten years.
Beyond these qualifiers and disqualifiers, nearly anyone can be an attorney-in-fact. It could be your spouse, an adult child, or a relative. It can even be someone who isn’t related to you, like a close friend. Ultimately, what’s important is that you trust the person completely. They must be able to make decisions that are in your best interest since, legally, it’s a decision made by you.
Nearly anyone can be an attorney-in-fact, as long as they’re over 18 and fit certain criteria.
It’s also important to have a power of attorney who is willing to make difficult choices. This is especially true if you’re naming a durable power of attorney. In some cases, your wishes may include them having to decide to “pull the plug,” to use a popular colloquialism. Your power of attorney must be willing and prepared to make these types of hard decisions.
Before giving power of attorney, you should meet with a lawyer. They’ll be able to help you define exactly what type of attorney-in-fact you’ll need and the scope of their power. Meeting with a lawyer to define your power of attorney is also important because the specific laws of power of attorney can vary from state to state.
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Having a power of attorney can be extremely helpful if you need someone to make difficult decisions for you at some point in time. If used incorrectly, though, it can have disastrous outcomes, either because someone gave powers of attorney to the wrong person or they didn’t give someone else the right powers. Before giving away your power of attorney, meet with a lawyer to figure out the specifics of your needs.
We, at the Shop & Enroll blog, are not lawyers or experts in the law. While we research our topics thoroughly and deliver information in good faith that it can help our readers, the words in this article should not be taken as an expert opinion. Before moving forward with any legal endeavors, the subject of this article included, please consult an attorney.