What is the Power of Attorney and Why Would I Give it to Another Person?
The power of attorney is an authorization you give to someone in order make decisions on your behalf when you become incapable of doing so because of injury or some other circumstance. This can be an asset to you and your family in a time of crisis. The power of attorney can deal with one or more of the following aspects of a family's finances:
- Paying the bills and taxes
- Buying, selling, property
- Investment and bank transactions
- Insurance policies
- Hiring someone to represent you in court
The person you give power of attorney to does not have to be a lawyer. Power of attorney simply means you are giving some else the right and responsibility to deal with aspects of your finances that normally only you would be allowed to handle. Your attorney-in-fact cannot do whatever he pleases, however, but instead must only act in such a manner that is in your best interests. If I Give Someone Power of Attorney, When Does it Go into Effect?
Essentially it goes into effect when you assign it to go into effect. You could make the power of attorney go into affect as soon as you have signed the agreement. Another option is that you could make the power of attorney conditional on you first being incapacitated. In that case, you will need to draft the power of attorney to include the process of doctor certification. Can I End the Power of Attorney Whenever I Want?
Yes. There are certain circumstances that will cancel the power of attorney: - You can cancel the power of attorney yourself at any time.
- A court might declare the document you used to establish power of attorney void if there is some sign of fraud or mental incompetence.
- In most states, if you grant your spouse power of attorney and you end up getting divorced, your spouse's power of attorney automatically becomes null and void.
- If your attorney-in-fact is not available when needed, his power of attorney could be cancelled. You can avoid this problem easily by naming an alternate attorney in fact.
- When you die, the power of attorney is automatically cancelled. If you designate that person to have control of your finances after you die, you must name them executor of your estate in your will.
Should I Consult a Lawyer When Arranging a Power of Attorney?
Deciding who will have power of attorney over your finances, and which of your finances they will have power over can be quite a complex process. Even though you do not have to name a lawyer as the person given power of attorney, you may want to consult a lawyer to help decide who would be an ideal candidate to have power of attorney, as well as what financial matters would be most appropriate and safest to bestow upon the attorney-in-fact, and what finances you might want to keep confidential. |
