Many recognize that the legal realm contains thousands of documents for countless legal matters. We always advise you to consult a qualified attorney for your legal needs to ensure the proper care of you and your loved ones. One critical document is the Power of Attorney, or POA, which we’ll detail below.
What is a Power of Attorney?
A power of attorney, or POA, grants legal authorization to a designated person (an agent) to act on another person’s (the principal or grantor) behalf. The agent receives general or limited authority to decide on the principal’s property, finances, investments, or medical care. POAs come in two types: financial and health care. Both kinds give the agent either general or limited authority.
Health Care POA
A health care POA, or HCPOA, lets a designated person make health-related decisions for another. People also call this a healthcare proxy. This document shows the principal’s agreement to provide the agent with POA privileges if a medical emergency or condition renders the principal incapacitated. An HCPOA becomes effective only when the individual can’t make health-related decisions on their own.
A financial power of attorney empowers someone to handle the business and financial dealings of the principal. This might involve signing checks, submitting tax returns, depositing Social Security checks, or managing investment accounts when the principal can’t decide financially. You can categorize Financial POAs as General Power, Limited, or Durable.
General Power of Attorney
A general POA lets the agent represent the principal in any matter as long as state laws allow it. Under this agreement, the agent can manage bank accounts, sign checks, sell property, handle assets, and submit taxes for the principal.
Limited Power of Attorney
A limited POA permits the agent to represent the principal in particular matters or events. This could specify that the agent only manages the principal’s retirement accounts, or it might apply for a defined time. For instance, if the principal travels abroad for an extended time, a limited POA would work only during that time.
Durable Power of Attorney
A DPOA controls certain legal, property, or financial issues as described in the agreement, even if the principal suffers from mental incapacitation. Though a DPOA can cover the principal’s medical bills, the durable agent cannot decide on the principal’s health matters, like removing life support or changing medications. A document named the “springing” power of attorney determines when a DPOA becomes active. This document should be precise to avoid confusion about when the triggering event takes place.
Can You Terminate a POA?
Several reasons can end a power of attorney: the principal might revoke the agreement or pass away, a court might find the contract invalid, or the agent might become unable to fulfill their duties. For married couples, if the principal and agent end their marriage, it might invalidate the authorization.
Why Would I Need a POA?
People require a power of attorney for various reasons, but one primary benefit is peace of mind. A power of attorney ensures that others will manage you and your affairs if you become incapacitated. Everyone has unique future needs and desires. Given the complexities of granting a power of attorney, we recommend consulting a qualified attorney to guide you and your family. Our outstanding team at Michaelson Law specializes in Elder Law and Estate Planning, including power of attorney authorizations. Contact us today!