Takeaways
- POA is a legal document to act on your behalf.
- The first step in creating a POA is choosing a trusted attorney-in-fact or agent.
- POA types include Durable, Special, Financial, Springing, and Medical.
- Choose a trustworthy, organized agent who respects your wishes.
Allowing someone to have power of attorney (POA) when you are unavailable or unable to decide can create confusion for many reasons. Further, you may face a legal conflict if you cannot make important decisions 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 crucial.
Below, we will clearly explain how you can give someone control over some aspects of your life. But first, what is a power of attorney?
In your power of attorney document, you can allow your agent or attorney-in-fact to represent you only concerning the specific matters you specify.
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.
Follow the guidelines below to grant a power of attorney to someone you trust.
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 that your attorney will know every detail involved in preparing a power of attorney document. If you have difficulty deciding, they can also provide professional advice.
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.
How To Choose an Agent
Because of the significant powers a POA grant an agent, choosing your agent wisely is vital. The following are five considerations to keep top of mind when picking an attorney in fact for your POA.
Choose someone you trust
Your agent will have control over at least some of the most important decisions affecting your health and wealth. You need to trust your agent implicitly without reservation.
Select someone located near you
It can be essential to name an agent located within reasonable proximity to you. Though not necessarily a deal-breaker in today's electronic world, someone who can quickly insert themselves in your place will make a smoother transition.
Pick an organized, level-headed person
Your agent will likely be adding their duties as attorney-in-fact to established career and family responsibilities. They will need to be organized so as to not be overwhelmed. Especially because of emotions regarding your incapacitation, they need to be level-headed.
Make sure they respect your wishes and values
Though you will explain your general desires in your POA, your agent should be someone who knows the details of your wishes and values. If you have a policy to avoid risky investments, you should avoid naming an attorney in fact who would gamble away your life savings.
Only choose someone willing to be your agent
Do not name someone who is not 100% committed to being your agent. The responsibilities may be daunting, and some people may not be equipped or have the time to carry out your wishes.
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.
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
It's important to note that each state has its own laws 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.
However, 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 a guardianship of a child.
Make sure you know your state's requirements when creating and filing your Power of Attorney.
Create your Power of Attorney now
Giving Someone Power of Attorney FAQs
-
What is an agent?
Your agent is legally authorized to act on your behalf. Despite being formally known as an attorney in fact, it is not required that your agent have legal training or be a lawyer.
An agent has a fiduciary duty towards you as the principal. This means that person must act towards your benefit, especially in financial matters. However, depending on state law, your agent can enter into deals that they benefit from themselves. So long as they act to your benefit as well, there is no breach of their fiduciary duty.
-
How do I get a Power of Attorney Form?
You can use lawdistrict's power of attorney templateand print it from. You get access to the POA form with an easy step-by-step guide that you can use as a helpful legal resource.
-
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.
Takeaways
- POA is a legal document to act on your behalf.
- The first step in creating a POA is choosing a trusted attorney-in-fact or agent.
- POA types include Durable, Special, Financial, Springing, and Medical.
- Choose a trustworthy, organized agent who respects your wishes.
Allowing someone to have power of attorney (POA) when you are unavailable or unable to decide can create confusion for many reasons. Further, you may face a legal conflict if you cannot make important decisions 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 crucial.
Below, we will clearly explain how you can give someone control over some aspects of your life. But first, what is a power of attorney?
In your power of attorney document, you can allow your agent or attorney-in-fact to represent you only concerning the specific matters you specify.
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.
Follow the guidelines below to grant a power of attorney to someone you trust.
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 that your attorney will know every detail involved in preparing a power of attorney document. If you have difficulty deciding, they can also provide professional advice.
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.
How To Choose an Agent
Because of the significant powers a POA grant an agent, choosing your agent wisely is vital. The following are five considerations to keep top of mind when picking an attorney in fact for your POA.
Choose someone you trust
Your agent will have control over at least some of the most important decisions affecting your health and wealth. You need to trust your agent implicitly without reservation.
Select someone located near you
It can be essential to name an agent located within reasonable proximity to you. Though not necessarily a deal-breaker in today's electronic world, someone who can quickly insert themselves in your place will make a smoother transition.
Pick an organized, level-headed person
Your agent will likely be adding their duties as attorney-in-fact to established career and family responsibilities. They will need to be organized so as to not be overwhelmed. Especially because of emotions regarding your incapacitation, they need to be level-headed.
Make sure they respect your wishes and values
Though you will explain your general desires in your POA, your agent should be someone who knows the details of your wishes and values. If you have a policy to avoid risky investments, you should avoid naming an attorney in fact who would gamble away your life savings.
Only choose someone willing to be your agent
Do not name someone who is not 100% committed to being your agent. The responsibilities may be daunting, and some people may not be equipped or have the time to carry out your wishes.
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.
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
It's important to note that each state has its own laws 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.
However, 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 a guardianship of a child.
Make sure you know your state's requirements when creating and filing your Power of Attorney.
Create your Power of Attorney now
Giving Someone Power of Attorney FAQs
-
What is an agent?
Your agent is legally authorized to act on your behalf. Despite being formally known as an attorney in fact, it is not required that your agent have legal training or be a lawyer.
An agent has a fiduciary duty towards you as the principal. This means that person must act towards your benefit, especially in financial matters. However, depending on state law, your agent can enter into deals that they benefit from themselves. So long as they act to your benefit as well, there is no breach of their fiduciary duty.
-
How do I get a Power of Attorney Form?
You can use lawdistrict's power of attorney templateand print it from. You get access to the POA form with an easy step-by-step guide that you can use as a helpful legal resource.
-
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.
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