Doc – Power of Attorney

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What is a Power of Attorney?

A power of attorney is your written, legal agreement granting authority to another person to act on your behalf should you ever need someone to make short or long term decisions for you.

On a Power of Attorney document, the person granting authority to another is the “Principal”. The person who is granted authority is called the “Attorney-in-fact” or “Agent”.

Types of Power of Attorney:

—  Limited: You give someone else the power to act on your behalf for a very limited purpose.  For Example: You may allow your financial advisor to invest your money without specifically speaking with you prior to the investment.

—  General: You give someone else all the powers and rights that you have yourself. For example, a general power of attorney may give someone the right to sign documents for you, pay your bills, and conduct financial transactions on your behalf. You could use a general power of attorney even if you were not incapacitated, but still needed someone to help you with financial matters. A general power of attorney ends on your death or incapacitation unless you rescind it before then.

—  Durable: You give someone else the power to step into your shoes if you become incapacitated, and to be able to carry out day to day financial decisions that you normally would have done for yourself.

Durable can be general or limited in scope, but it remains in effect after you become incapacitated. Without a durable power of attorney, if you become incapacitated, no one can represent you unless a court appoints a conservator or guardian. A durable power of attorney will remain in effect until your death unless you rescind it while you are not incapacitated.

— Springing:  You give someone else the power to step into your shoes if you become incapacitated.  This is like the durable power of attorney with the exception that you can specify that the power of attorney become effective only if you become incapacitated.  If you are using a springing power of attorney, it is very important that the standard for determining incapacity and triggering the power of attorney be clearly laid out in the document itself.

Durable Power of Attorney is Recommended

A good durable power of attorney is a very important tool to have for not only should you become incapacitated or just need help with managing your financial affairs; it is also good to have if you are talking about Medicaid and long term care planning, because if you are incapacitated, it will give the person that you choose, the ability to do what is necessary in order to protect the most amount of your assets possible, while also qualifying you, whether it be for Medicaid or any other kind of governmental benefits.

What Powers Can You Grant to a Person?

Why Create a Power of Attorney?

Creating a power of attorney lets you determine who can act on your behalf when you need assistance; instead of having a probate court or other people interceding to act in ways you may not approve of.