A power of attorney, or POA, is a legal document that lets you appoint a person or organization to manage your medical, property, or financial affairs if you become unable to do so yourself. Different types of POAs will give your attorney-in-fact or agent, the individual you choose to make the decisions for you, different levels of control.
A general power of attorney will give broad powers to the attorney-in-fact (also known as the agent) you appoint. Some powers that a general power of attorney covers include the following:
A general power of attorney is useful if you would like someone to handle some or all of these matters on your behalf. This type of POA often will be included in an estate plan to ensure someone can always handle your financial concerns. Contrast this with a durable power of attorney, which remains in effect even if you become mentally incompetent. A durable power of attorney is typically used in state planning as well.
If your power of attorney document does not include specific limitations, it will give your agent broad power over financial or medical decisions. Regardless, the agent is expected to act in the best interest of the principal, the person authorizing the agent to act on his or her behalf. An agent cannot do the following:
The agent can continue to make decisions following the death of the principal if:
An agent does have the right at any time to decline an appointment. An agent cannot, however, choose who will take over the role unless the principal has named an alternate or co-agent in the same POA document, or the principal is still competent to appoint someone else.
A power of attorney document generally becomes null and void in any of the following circumstances:
However, a durable power of attorney remains in effect even if the principal becomes mentally incompetent. A principal is considered mentally incompetent in the following circumstances:
You may choose to sign a durable power of attorney to ensure that you avoid any problems if you become mentally incompetent as a result of an accident or illness while you have a POA in effect. A durable power of attorney is a general, special, or health care power of attorney document that also includes a durability provision that keeps the current POA in effect if you become incapacitated.
You may include provisions stating that the POA cannot go into effect until a physician certifies that you are truly mentally incompetent, even naming the specific doctor you want to make the determination about your competency. You can also require that two licensed physicians must agree on your mental state for the POA to go into effect.
You can sign a special or limited power of attorney if you want to detail the exact powers your agent can exercise. A special power of attorney will frequently be used for someone who cannot handle certain affairs because of health reasons or other commitments. A special power of attorney document may specify matters such as the following:
You can determine a health care power of attorney if you want to appoint an agent to make medical decisions for you. A health care POA will typically be used if:
A health care power of attorney is not the same as a living will , a document in which you state your wishes for end-of-life medical care in the event that you become unable to communicate your decisions. Many states will let you include your preference for whether you would like to stay on life support in this POA document. Additionally, some states may allow you to create an advance health care directive that combines a living will and health care power of attorney.
Trust will be the most important factor when you select your agent. Individuals you may appoint as your agent include a relative, friend, attorney, or organization.
You want to make sure you choose someone you know will act in your best interest. You also want to know that your agent will respect your wishes, and you should trust that your agent will not abuse the powers you grant.
An agent should keep accurate records of any transactions made on your behalf and should give you periodic updates. To safeguard yourself further, direct your agent to give these updates and accounts to a third party, such as an attorney, if you are not able to review the updates yourself.
You may appoint multiple agents. If you do so, you will need to determine whether your agents must act separately or jointly when making decisions.
Benefits of appointing more than one agent include the following:
Disadvantages of appointing more than one agent may be as follows:
If you decide to appoint only one agent, you should also have a successor. A successor agent will take over POA duties from the first agent if necessary. Examples of occasions a new agent will need to take over can include the original agent falling ill or becoming injured, or otherwise being unable to serve when needed. If you appoint a successor agent, you can be sure the person chosen is someone you also trust.
Legal liability for a power of attorney agent is limited. The agent will only be held responsible in cases of intentional misconduct. An agent will not be legally responsible if he or she does something wrong without knowing it.
POA documents will include these protections to encourage appointed agents to accept the detailed responsibilities. Agents typically perform duties without financial compensation. If you or a loved one suspects that wrongdoing on the part of your agent has occurred, immediately report the abuse you suspect to law enforcement and speak with an attorney.
Consult with an attorney when drafting important documents so that you know you have someone you trust to make important decisions for you in times of need.
ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.