Allowing someone a power of attorney (POA) when you are unavailable or unable to decide can create confusion for many reasons. Further, you will probably face a legal conflict when you cannot decide about your estate, medical condition, or finances - personal or business.
Small businesses are not immune to the same problems, so understanding what a power of attorney is and establishing one is an important step. Our article explains clearly what a power of attorney is and how you can give someone control over some aspects of your life. But first, briefly, and for context, what is a Power of attorney?
How to Grant a Power of Attorney
When you expect you won't manage your affairs at some point, it might be necessary to appoint someone. The very first step is to choose the person who will serve as your attorney-in-fact or agent. Appointing a power of attorney is significant but relatively straightforward - it's a matter of drafting paperwork.
This legal document may be too important to risk a mistake or mishandling. A more effective method for establishing a power of attorney is to contact a family law attorney in your state. Picking someone to act on your behalf is never a simple decision. Frequently, the decision comes from a sick or elderly loved one.
Appointing a trusted individual to step in for you is one of the best ways to protect yourself and your family from the unknown.
Identify the Scope of Authority with the right POA
Before making any rash decisions, speak to an attorney to get a better idea of the process. The decision is entirely yours. However, remember your attorney will know every detail involved in preparing a power of attorney document. You can also get professional advice from them if you have difficulty deciding.
Every Power of Attorney document should reflect the principal's wishes and POA rights and limitations. Here are the different types.
Durable Power of Attorney
An agent's duties begin immediately after signing the document and continue in the principal's event of incapacitation. It is important to specify the details of the agent's role and expectations in a durable power of attorney, whether ordinary/general or limited.
A durable power of attorney, for example, may let an agent handle the finances of a principal before and after they become incapacitated. You can find all the legal details of a durable power of attorney under The Uniform Durable Power of Attorney Act (UDPA).
Special POA
Agents handle either medical or financial decisions for principals, but never both. An agent with limited power of attorney may make a one-time decision on behalf of the principal, such as signing a contract.
Financial POA
An agent can manage the business and financial affairs of the principal with this document, for example, signing checks, filing tax returns, mailing and depositing Social Security checks, and managing investment accounts if the principal becomes unable to handle their affairs. The attorney-in-fact takes on the liability for carrying out the principal's wishes to the best of their abilities.
Springing POA
A springing power of attorney only takes effect when the principal becomes incapacitated. In the document, define what it means to determine that the principal is incapacitated to ensure there are no discrepancies between parties.
Medical POA
A medical power of attorney gives an agent the power to make health-related decisions for you. The healthcare proxy document outlines the principal's consent to grant a power of attorney (POA) to an agent if an unfortunate medical condition arises.
Choose the Right Person
You are entrusting someone with your life when you choose an agent. State if your agent signs contracts for you, or do they make all your financial and healthcare decisions until you pass away?
If you do not have a trusted person's life, consider hiring a professional fiduciary–with limited power of attorney and responsible only for your financial assets. You will want to arrange a meeting between your attorney-in-fact and your attorney once you decide on a representative.
Draft and Fill Out a Power of Attorney Form
Once you have determined who your agent is and what duties they will handle, you can create the power of attorney document. It is a simple template where you include your name (principal) and your agent's name. Each form lists the roles of the agent, and you only need to check the corresponding boxes, giving powers to your agent.
Review State Laws
Each state has its law regarding creating and using valid power of attorney documents. For example, under Missouri law, durable powers of attorney must be signed before at least two witnesses but allow the principal to revoke a power of attorney. But Pennsylvania law permits the principal (the person granting the powers) to specify specific duties, including health care and financial matters.
Validate the POA document
You may present the form to the county clerk to validate the document. Before signing, be sure to check your state's requirements on how to assign a power of attorney.
File the Power of Attorney
Depending on the state, you may need to file a power of attorney with a court or government office before making them effective. Ohio, for example, requires that grandparents file with the juvenile court for cases involving the Power of Attorney VS Guardianship of a child.
As part of the requirement, the county where the property is located must record a power of attorney for transferring real estate. LawDistrict understands the impact of a power of attorney; visit us to learn more about safeguarding your interests and downloading a power of attorney form.
Giving Someone Power of Attorney FAQs
-
Can I have more than one agent at a time?
Yes, depending on your circumstances, one person may manage your financial affairs, and another might handle your health care. However, you may wish to have one person handle every aspect of your life.
-
How do I get a Power of Attorney Form?
You can download a power of attorney form and print it –each state uses its version– from the LawDistrict site here. You get access to the POA form with an easy step-by-step guide.
Allowing someone a power of attorney (POA) when you are unavailable or unable to decide can create confusion for many reasons. Further, you will probably face a legal conflict when you cannot decide about your estate, medical condition, or finances - personal or business.
Small businesses are not immune to the same problems, so understanding what a power of attorney is and establishing one is an important step. Our article explains clearly what a power of attorney is and how you can give someone control over some aspects of your life. But first, briefly, and for context, what is a Power of attorney?
How to Grant a Power of Attorney
When you expect you won't manage your affairs at some point, it might be necessary to appoint someone. The very first step is to choose the person who will serve as your attorney-in-fact or agent. Appointing a power of attorney is significant but relatively straightforward - it's a matter of drafting paperwork.
This legal document may be too important to risk a mistake or mishandling. A more effective method for establishing a power of attorney is to contact a family law attorney in your state. Picking someone to act on your behalf is never a simple decision. Frequently, the decision comes from a sick or elderly loved one.
Appointing a trusted individual to step in for you is one of the best ways to protect yourself and your family from the unknown.
Identify the Scope of Authority with the right POA
Before making any rash decisions, speak to an attorney to get a better idea of the process. The decision is entirely yours. However, remember your attorney will know every detail involved in preparing a power of attorney document. You can also get professional advice from them if you have difficulty deciding.
Every Power of Attorney document should reflect the principal's wishes and POA rights and limitations. Here are the different types.
Durable Power of Attorney
An agent's duties begin immediately after signing the document and continue in the principal's event of incapacitation. It is important to specify the details of the agent's role and expectations in a durable power of attorney, whether ordinary/general or limited.
A durable power of attorney, for example, may let an agent handle the finances of a principal before and after they become incapacitated. You can find all the legal details of a durable power of attorney under The Uniform Durable Power of Attorney Act (UDPA).
Special POA
Agents handle either medical or financial decisions for principals, but never both. An agent with limited power of attorney may make a one-time decision on behalf of the principal, such as signing a contract.
Financial POA
An agent can manage the business and financial affairs of the principal with this document, for example, signing checks, filing tax returns, mailing and depositing Social Security checks, and managing investment accounts if the principal becomes unable to handle their affairs. The attorney-in-fact takes on the liability for carrying out the principal's wishes to the best of their abilities.
Springing POA
A springing power of attorney only takes effect when the principal becomes incapacitated. In the document, define what it means to determine that the principal is incapacitated to ensure there are no discrepancies between parties.
Medical POA
A medical power of attorney gives an agent the power to make health-related decisions for you. The healthcare proxy document outlines the principal's consent to grant a power of attorney (POA) to an agent if an unfortunate medical condition arises.
Choose the Right Person
You are entrusting someone with your life when you choose an agent. State if your agent signs contracts for you, or do they make all your financial and healthcare decisions until you pass away?
If you do not have a trusted person's life, consider hiring a professional fiduciary–with limited power of attorney and responsible only for your financial assets. You will want to arrange a meeting between your attorney-in-fact and your attorney once you decide on a representative.
Draft and Fill Out a Power of Attorney Form
Once you have determined who your agent is and what duties they will handle, you can create the power of attorney document. It is a simple template where you include your name (principal) and your agent's name. Each form lists the roles of the agent, and you only need to check the corresponding boxes, giving powers to your agent.
Review State Laws
Each state has its law regarding creating and using valid power of attorney documents. For example, under Missouri law, durable powers of attorney must be signed before at least two witnesses but allow the principal to revoke a power of attorney. But Pennsylvania law permits the principal (the person granting the powers) to specify specific duties, including health care and financial matters.
Validate the POA document
You may present the form to the county clerk to validate the document. Before signing, be sure to check your state's requirements on how to assign a power of attorney.
File the Power of Attorney
Depending on the state, you may need to file a power of attorney with a court or government office before making them effective. Ohio, for example, requires that grandparents file with the juvenile court for cases involving the Power of Attorney VS Guardianship of a child.
As part of the requirement, the county where the property is located must record a power of attorney for transferring real estate. LawDistrict understands the impact of a power of attorney; visit us to learn more about safeguarding your interests and downloading a power of attorney form.
Giving Someone Power of Attorney FAQs
-
Can I have more than one agent at a time?
Yes, depending on your circumstances, one person may manage your financial affairs, and another might handle your health care. However, you may wish to have one person handle every aspect of your life.
-
How do I get a Power of Attorney Form?
You can download a power of attorney form and print it –each state uses its version– from the LawDistrict site here. You get access to the POA form with an easy step-by-step guide.
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