Estate planning is important, and creating a power of attorney can be critical to protecting financial resources and other assets. A power of attorney (or “POA”) is a document that allows a person to designate a person or organization to manage his or her affairs in the event he or she is unable to do so. The specific laws for creating a power of attorney vary based on the state where a person lives, but there are some basics common to all.
Without a POA for financial, medical, and other pertinent information, family members may be unable to act without court intervention. In those cases, the state may appoint a person to make decisions for an individual, if there is no POA.
The main types of POA are the general power of attorney, health care power of attorney, durable power of attorney and special power of attorney. While some of the responsibilities in these documents can overlap, there are some legal differences. A durable power of attorney concerns all of the appointments involved in general. The document will remain in effect or take effect, if a person becomes mentally incompetent. Certain powers of attorney may terminate at a specific time.
Depending on the terms of the document, an agent appointed through a power of attorney may make decisions in the following areas for an incapacitated individual: banking, the sale or purchase of property, filing tax returns, coordinating government-supplied benefits, deciding medical care and making estate-planning decisions.
Although a power of attorney document can be a fairly simple document that can be completed on your own, it’s best to work with an estate planning attorney to get a firm understanding of the intricacies of this important document.
Reference: The Villager (December 14, 2016) “Power of attorney protects loved ones”