Setting up power of attorney rights is a key component of estate planning strategies. This legal document gives authorization to another person, known as the attorney-in-fact or agent, to engage in financial transactions or make healthcare decisions on your behalf.
Before granting sweeping power of attorney rights it is imperative to learn about the different kinds of rights and how they are used. Anyone selected as an attorney-in-fact needs to be able to make decisions regardless of what anyone else thinks, other than you.
Designated agents have to be of legal age and can’t have issues that would hinder their ability to perform duties. This might be felony charges, mental illness, or debilitating physical ailments. It’s vital to select an agent that will stay true to decisions you make regarding personal healthcare and finances.
The rights provided depend upon the type of power of attorney form used. All POA forms include the Principal and Attorney-in-Fact. Principal refers to the person executing the POA document, while attorney-in-fact is the person in charge of responsibilities established in the POA.
The most common form is Durable Power of Attorney. This form gives the attorney-in-fact authorization to manage personal finances; operate a business; or buy, sell or trade titled property like cars and real estate. POA rights are effective until the Principal dies or issues a revocation of powers form.
Non-Durable power of attorney is used to grants rights for specific kinds of transactions. This POA form is often used when a person undergoes a surgical procedure or when going out of town for an extended period of time. These rights are only valid until the transaction is complete or until a specified date.
Limited power of attorney is exactly as it sounds. The attorney-in-fact is limited in the type of transaction they can conduct. Limited POA is often used to authorize a person to buy or sell real estate or other forms of titled property. Privileges are revoked upon completion of the transaction.
A medical power of attorney is used to grant rights to the attorney-in-fact for making healthcare decisions for the Principal. It is crucial to talk to your agent regarding the kind of medical treatments you do or do not want to have. This document demands that physicians abide by your wishes and directives provided by the agent.
While it can be uncomfortable to talk about tragic situations, it is a good idea to be open about the type of medical care you are opposed to if the unthinkable should occur. If you have strong opinions about not being subjected to certain types of life support it is imperative to let your decisions be known in a healthcare power of attorney.
Last, but not least, a springing power of attorney form is needed to provide authorization for release of medical records. With this form, the attorney-in-fact has to appear in court when making decisions for the Principal.
It is recommended to obtain legal counsel before executing power of attorney documents. Attorneys can provide advice regarding which POA form is most appropriate and help you choose an attorney-in-fact that is qualified to perform duties.