Talk to an Estate Attorney About the Benefits of a POA
A power of attorney (POA) creates a legally binding document appointing an agent, preferably someone you trust implicitly, to manage your property, medical, or financial affairs. Typically, it comes into play when you're incapable of managing your affairs. Some POAs take effect upon signing. But others become effective only after you're incapacitated. A POA is a crucial component in estate planning. So it's critical to talk with a POA attorney near you when drafting the document.
Although it's not something you want to think about, a POA offers some peace of mind by delivering these benefits:
- Allows you to select the person you want to make decisions on your behalf
- Helps avoid guardianship or conservatorship
- Clarifies your intent
- Protects your agent from financial abuse claims
- Allows someone to perform planning and financial actions on your behalf
Although a power of attorney takes effect at different times, it voids after your death. Apart from death, a POA can terminate for other reasons. For example, if you revoke the agreement or a court invalidates it. It can also cancel if the agent, known as the attorney-in-fact, can no longer carry out the responsibilities. The authorization typically invalidates following the divorce if you're married and divorced.
Note that no power of attorney document becomes legally binding until signed and executed according to Pennsylvania state laws. In addition, you must also be of sound mind when appointing your agent. Owing to the importance of this document, you must consult with a POA attorney near you or consult with an estate lawyer.
Types of Power of Attorney
The various types of POA documents determine the scope of the agent's authority. Often, people believe that they don’t need a POA if they have a spouse. Unfortunately, that's not the case. Your spouse cannot handle assets in your name alone. You should consult with a POA attorney to determine which POA best fits your needs. Moreover, you might want to consider your will and perhaps a living will during your discussion.
Some of the most common power of attorney types include:
Limited Power of Attorney
Also referred to as a special power of attorney, this POA document gives an agent the authority to act on someone’s behalf for a limited purpose and for a limited time. For example, selling property, managing real estate, collecting debts, and handling business transactions typically fall under a limited POA. When drafting the document, you specify what powers your agent may exercise.
General Power of Attorney
This power of attorney confers the same powers as the principal to the agent. As a result, your agent can sign documents, pay bills, settle claims, make gifts, operate business interests, and manage finances. However, it terminates if you become incapacitated or die. Often, a general power of attorney works well if you'll be out of the country and need someone to manage some affairs. It can also be effective if you're physically or mentally incapable of managing affairs.
Springing Power of Attorney
A springing POA activates when you're declared mentally incompetent or physically incapacitated. As a result, it's vital that the document clearly spells out those circumstances.
Durable Power of Attorney
If incapacitated because of illness or a sudden accident, a durable POA allows your attorney-in-fact to continue acting in your interest. So it keeps a power of attorney active. You can specify in the document whether you'd like your agent to have authority when the document is signed. Otherwise, it can take effect once a doctor declares you incompetent. Moreover, you can specify your preferred physician making the declaration. By the way, a non-durable POA ceases the moment you're declared incapacitated.
Ordinarily, a power of attorney revokes automatically should you later become disabled or lose the ability to revoke or recall the POA. However, a durable POA contains language that specifically exempts it from this requirement. A durable power of attorney deals specifically with the situation where you cannot handle your affairs.
Therefore, it becomes most important should illness, the ravages of age or a devastating accident deprive you of the ability to act on your behalf. Again, make sure you consult with a POA attorney to ensure you draft a POA document that meets your wishes precisely.
Our Montgomery County and Bucks County estate lawyers talk about a durable POA.
Medical Power of Attorney
A medical power of attorney, often called a durable healthcare power of attorney, grants your agent the ability to obtain medical records for you, assist you in making health care decisions, and speak with your health care providers. If you cannot understand, make or communicate a health care decision, this document gives your agent the authority to do so for you.
This POA differs from a living will, but many states allow you to include your preference about life support in a medical POA.
Watch our video about medical power of attorney.
Work with a POA Attorney to Choose an Agent
Remember, a POA grants immense ownership, authority, and responsibility. Indeed, it's a matter of life and death in the case of a medical POA. Moreover, if your agent mishandles your affairs, you could face significant financial difficulties, even bankruptcy if you end up with a mishandled or abused durable POA. So you must select your agent carefully. That's why you might want to consult with a POA attorney near you.
You want to appoint a person who is both trustworthy and capable of serving as your agent. After all, this person will act with the same legal authority as you. As a result, any mistakes made by your agent may be challenging to correct. For example, you may give your agent access to bank accounts or provide them with the ability to sell your property.
Your agent can be any competent adult, including a professional such as an attorney, accountant, or banker. In addition, you can also select a family member and save money versus choosing a professional.
Talk to a POA Attorney
If you're serious about estate planning, a power of attorney document is mandatory regardless of its type. It protects you and your family in numerous ways. So talk to a POA attorney at our law firm serving Bucks and Montgomery Counties. We'll help determine which POA works best for your needs. We can also support you with estate litigation, trusts, guardianships, and other critical estate planning matters.