Power of at­tor­ney pro­tects loved ones

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Life is full of the un­ex­pected. But just be­cause the fu­ture is un­pre­dictable does not mean adults can­not pre­pare for what lies ahead. Es­tate plan­ning is im­por­tant, and es­tab­lish­ing power of at­tor­ney can be es­sen­tial for men and women look­ing to pro­tect their fi­nan­cial re­sources and other as­sets.

What is power of at­tor­ney?

A power of at­tor­ney, or POA, is a doc­u­ment that en­ables an in­di­vid­ual to ap­point a per­son or or­ga­ni­za­tion to man­age his or her af­fairs should this in­di­vid­ual be­come un­able to do so. Ac­cord­ing to the Na­tional Care­givers Li­brary, POA is granted to an “at­tor­ney-in-fact” or “agent” to give a per­son the le­gal author­ity to make de­ci­sions for an in­ca­pac­i­tated “prin­ci­pal.” The laws for creat­ing a power of at­tor­ney vary de­pend­ing on where a per­son lives, but there are some gen­eral sim­i­lar­i­ties re­gard­less of ge­og­ra­phy.

Why is power of at­tor­ney needed?

Many peo­ple be­lieve their fam­i­lies will be able to step in if an event oc­curs that leaves them in­ca­pac­i­tated and un­able to make de­ci­sions for them­selves. Un­for­tu­nately, this is not al­ways true. If a per­son is not named as an agent or granted le­gal ac­cess to fi­nan­cial, med­i­cal and other pertinent in­for­ma­tion, fam­ily mem­bers’ hands may be tied. In ad­di­tion, the gov­ern­ment may ap­point some­one to make cer­tain de­ci­sions for an in­di­vid­ual if no POA is named. Just about ev­ery­one can ben­e­fit from es­tab­lish­ing an at­tor­ney-in-fact. Do­ing so does not mean men and women can­not live in­de­pen­dently, but it will re­move the le­gal bar­ri­ers in­volved should a per­son no longer be phys­i­cally or men­tally ca­pa­ble of manag­ing cer­tain tasks.

Power of at­tor­ney varies

Power of at­tor­ney is a broad term that cov­ers var­i­ous as­pects of de­ci­sion-mak­ing. Ac­cord­ing to the le­gal re­source ‘Lec­tric Law Li­brary, the main types of POA in­clude gen­eral power of at­tor­ney, health care power of at­tor­ney, durable power of at­tor­ney, and spe­cial power of at­tor­ney. Many of the re­spon­si­bil­i­ties over­lap, but there are some sub­tle le­gal dif­fer­ences. Durable power of at­tor­ney, for ex­am­ple, re­lates to all the ap­point­ments in­volved in gen­eral, spe­cial and health care pow­ers of at­tor­ney be­ing made “durable.” This means the doc­u­ment will re­main in ef­fect or take ef­fect if a per­son be­comes men­tally in­com­pe­tent. Cer­tain pow­ers of at­tor­ney may fall within a cer­tain time pe­riod.

What is cov­ered?

An agent ap­pointed through POA may be able to han­dle the fol­low­ing, or more, de­pend­ing on the ver­biage of the doc­u­ment:

• bank­ing trans­ac­tions

• buy­ing/sell­ing prop­erty

• set­tling claims

• fil­ing tax re­turns

• manag­ing gov­ern­ment-sup­plied ben­e­fits

• main­tain­ing busi­ness in­ter­ests

• mak­ing es­tate-plan­ning de­ci­sions

• de­cid­ing on med­i­cal treat­ments

• sell­ing per­sonal prop­erty

• ful­fill­ing ad­vanced health care di­rec­tives Although a power of at­tor­ney doc­u­ment can be filled out and an agent ap­pointed on one’s own, work­ing with an es­tate plan­ning at­tor­ney to bet­ter un­der­stand the in­tri­ca­cies of this vi­tal doc­u­ment is ad­vised.

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