The Importance of Having A Power of Attorney

Posted on January 9, 2023 by shieldsandboris

No matter what age you are, it is important to make sure that your affairs are in order and that your intentions are understood around such important issues as medical decisions, financial organization, or property affairs. Anyone can benefit from having a trusted person appointed with the right and ability to manage their affairs on their behalf. However, as a person ages, that right becomes more and more critical because of the increasing likelihood of being incapacitated or being rendered otherwise unable to handle certain important issues alone.

The power of attorney selection process is an important part of the process of making a lifetime plan. Laws and requirements differ from state to state, so it is important to do your research about the guidelines and rules in your home state. In any state, however, power of attorney gives a person the ability to act on your behalf as your agent, regardless of where you live.

When it comes to designing and assigning power of attorney, you have control. For example, power of attorney may be restricted to a specific activity, such as the selling of your home, or it may be a general power that gives a trusted individual temporary or permanent authority to act for you. Power of attorney can also be set up to take effect immediately or at a later time. This later time can be specified directly as a date or can be set up to take effect once a certain condition has been fulfilled. The purpose of power of attorney is to make sure that your will and intent are served by a person with the power to do so, so it is only natural that you can customize the terms of that power. Power of attorney can also be considered a form of asset protection.

A power of attorney may always be revoked, but most states require written notice of revocation to be provided to the person named to act on your behalf.

When you have a power of attorney, the person named to act on your behalf is usually referred to as your "agent" or "attorney-in-fact." The agent has the power to take any action the document permits and can often be referred to as your "agent" or "attorney-in-fact." When your agent invokes the power, your agent usually needs to provide the paper document to the party to which they are invoking power of attorney.

In case, for example, another person is acting on your behalf for the sale of a home, the relevant department in your state will usually require your agent to present a power of attorney document before your agent's authority to hand over the title will be honored. A power of attorney must also be presented to the title company by an agent who signs documents on your behalf when buying or selling real estate.

Power of attorney is an especially important tool to have if you are facing situations where you may not be able to act on your own behalf due to absence or incapacity because of a temporary or permanent disability. A temporary disability may occur due to travel, an accident, or an illness, and a permanent disability may result in an enduring inability to act on your own behalf.

Types of Power of Attorney

Your ability to customize the terms of the power of attorney you bestow is wide-ranging, but the types of power of attorney generally comprise four categories according to the degree of responsibility, the timing of the power, and other factors.

Limited Power of Attorney

You must clearly state what authority you are giving your agent as soon as you sign the contract, and it will continue to be effective until you become mentally incapable of making coherent decisions. In this case, the authority given to your agent is limited. There could be a specific reason, such as the authority to sell a house or even access to specific bank accounts.

Durable Power of Attorney

If you sign a durable power of attorney, it goes into effect the moment it is signed, but it stays in effect for the rest of your life unless you initiate cancellation. It is important that your agent's power should be retained even if you become incapacitated. In addition to being easy and inexpensive for the agent to manage affairs, durable power of attorney is also popular because it is less ambiguous than some of the others.

Springing Power of Attorney

There is a specific instance in which this power of attorney comes into play—you enter a coma, for instance. In order to ensure that this POA will work properly, it must be carefully worded to ensure that there is no confusion as to exactly what the triggering event is.

Medical Power of Attorney

Another common type of power of attorney is the medical type. A medical power of attorney is designed to give an agent power to act in the case that the principal is rendered unsound in mind or body and is unable to make decisions for themselves. Agents with medical power of attorney are given the ability to make critical medical decisions and sometimes important financial decisions related to the medical situation.

What if I Do Not Have a Power of Attorney Designated?

It is important to understand that a power of attorney cannot be designated after the fact in the event of a catastrophe rendering a potential principal incapable of making decisions. This responsibility will fall automatically to the next of kin, and if you have not set up a power of attorney in advance, nothing can be done to change this process. If you wish to have a trusted party designated, you must act in advance to bestow a power of attorney to that trusted party.

Speak With a Lawyer Today

As you undergo the various steps of estate planning, you should work to make sure that you have designated a power of attorney. Consult an experienced lawyer today to protect yourself from forces outside of your control. The law offices of Shields & Boris specialize in providing comprehensive services in all aspects of the estate planning process. Lawyers at Shields & Boris pride themselves on serving the whole person and improving all aspects of a client’s life. Our lawyers can provide help with asset protection and provide general guidance on many little-discussed aspects of estate planning. We serve all throughout the Pittsburgh area. Contact the law offices of Shields & Boris today or call (724) 302-3718 to speak directly with a lawyer.

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