What is a Power of Attorney?
A power of attorney is a document by which you appoint someone to make decisions on your behalf. The person appointed in a Power of Attorney is often referred to as an “agent” or an “attorney-in-fact.”
There are generally two types of powers of attorney: medical and financial.
Medical Power of Attorney
A medical power of attorney names agents to make healthcare and medical decisions on your behalf. In some states, the medical power of attorney may be a part of a living will or health care directive.
Financial Power of Attorney
A financial power of attorney names agents to handle financial and business decisions on your behalf. Financial powers of attorney may be broad and apply to nearly any non-medical decision.
What can the Agent under a Power of Attorney do?
You have significant control over what your agent may do on your behalf.
The authority given to an agent may be broad or may be limited to specific uses. Your agent’s powers may be effective immediately or they may only become effective if you are unable to make decisions for yourself. You may also set an expiration for your agents powers, having those powers terminate after a specific time period or terminate if you become incapacitated.
Why do I need a Power of Attorney?
A power of attorney lets you designate an agent to take action and make decisions on your behalf. This may be critical if you are unable to act for yourself due to medical or other reasons.
For example, if you are incapacitated, agents may be authorized to make decisions regarding your medical treatment, continue operating your business, and pay your personal bills. Without a power of attorney, it may be necessary to go through an expensive and time-consuming court proceeding to authorize even these very essential actions.
Powers of attorney are an important part of the basic estate planning everyone should have in place. Accidents and illnesses are unpredictable and may wreak havoc upon you and your family. Having a power of attorney in place may help you and your family get through a difficult situation a little easier.
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