Power of attorney is legal authority that you give to an individual to handle your legal and medical affairs in case you become incapacitated legally, mentally, or medically and cannot tend to these issues yourself.

The designated person does not have to be a lawyer. Often, they are a close friend or family member, and they can even be an organization. This person whom you designate is called an attorney-in-fact.

What are the Different Types of Power of Attorney?

There are three different kinds of power of attorney privileges:

  1. General: A general power of attorney gives the designated person or entity the broadest authority over your interests. Someone who possesses a general power of attorney has power to handle business issues, financial issues, insurance matters, legal claims, gifts and donations, and hiring related to executing these interests.
  2. Special: Special power of attorney privileges are simply more specific. For instance, you can designate a special power of attorney to handle real estate, address debts owed to you or debts or you need to pay, or to manage specific business interests on your behalf. A health care power of attorney is specific to medical issues.
  3. Durable: A durable power of attorney is specifically for the mentally incapacitated, as it lasts until the person’s death regardless of what happens to the person. Individuals suffering from an illness that they know will later affect their mental functioning will want a durable power of attorney to act on their behalf.

How Do I Create a Power of Attorney?

Most states offer simple forms to help you create a power of attorney for finances and legal documents. The document must be signed, witnessed and notarized by an adult. The person that is signing the document and granting power of attorney must have capacity and know what they are signing.

After you have selected the person to whom you want to grant power of attorney and discussed the specifics of the agreement with them, you will need to sign a power of attorney form.

There are template forms that can be used as a guide, but it is always best to get legal advice from a lawyer to ensure that the document that you intend to use to convey the power of attorney to another meets all of your requirements and is legally binding.

Who Can Grant Power of Attorney?

Anyone with the appropriate mental capacity can grant the power of attorney to another. The person granting the power of attorney is the "principal" or "grantor," and the person who attains the responsibility is known as the "agent" or "attorney-in-fact."

A "principal" will grant the power of attorney to an "agent" or "attorney-in-fact." The agent becomes the holder of the power of attorney and will make various decisions for and act on behalf of the principal in transactions involving banking, property, or law. The agent does not have to be a lawyer. She may be a trusted friend or even a family member.

Can Power of Attorney Continue After Incapacitation?

A power of attorney can only be created if the person granting the power of attorney understands what type of document they are signing. If the person who is granting the power of attorney is incapacitated, then they cannot create a power of attorney for another person to sign.

The interested party can petition the court for guardianship. Guardianship can be over the person, the property or the person and property of the incapacitated person. After being made the guardian, they can have the legal ability to make the decisions pertaining to the realm over which he court gave you guardianship.

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Can the Power of Attorney Be Revoked?

The principal may not revoke the durable power of attorney after incapacitation. However, this is rarely an issue because legal incapacitation is more grievous than medical incapacitation. A legally incompetent person is not able to understand what she is signing and is often not even aware of her own condition.

Likewise, an already incompetent person cannot grant a durable power of attorney. In the case of gradual incapacitation, such as Alzheimer’s disease, an elderly person usually appoints a legal guardian who will take care of them and manage all their affairs after incapacitation.

Should I Appoint a Power of Attorney When I Still Have Capacity?

Yes, you can only grant power of attorney when you have capacity or there will be no power of attorney to give. If the person has failed to appoint a guardian or grant a durable power of attorney before she becomes incapacitated, the probate court may assign a "conservator" or guardianship to manage her affairs.

However, most people do not want a conservator, as their affairs would be made public. People with any kind of an estate will generally think ahead and grant a durable power of attorney and/or guardianship.

Do I Need a Lawyer?

You should consider contacting a local estate planning attorney to assist in the drafting your power of attorney. An experienced attorney at law will be able to ensure that the document is enforceable and your rights are protected.