Power of Attorney
A Power of Attorney (or POA) is an important legal document that can grant far-reaching powers to an individual who you trust.
Once active, the principal (the person granting this authority) gives their agent the mandate to manage important financial or medical decision-making powers in the event that they are unavailable to make them themselves, or are incapacitated for any reason.
In this article, we explain how Power of Attorneys functions as a legal instrument. It details how a Power of Attorney is appointed, what agents can do once it comes into effect as well as the kinds of Power of Attorney forms that exist.
How is An Agent Chosen?
When you appoint someone as your Power of Attorney, you can remove this authority from the agent at any time, for any reason. This applies as long as you are sound of mind and mentally competent.
An Attorney-in-Fact doesn’t need to be an actual attorney or practicing lawyer. The most important thing is that they are someone you trust or who is competent enough to manage the decisions you need to be made.
In many cases, people choose their spouses, close family, or friends as their Power of Attorney. However, in situations where more complicated powers are being granted, you may choose a suitable professional instead.
A POA form normally lets you appoint more than one agent if you choose to. These co-agents can have equal authority or specific authority depending on your desires.
Power of Attorney templates will also normally let you name successor agents or alternate agents in case one of your first choices has to drop out for any reason.
What Powers Does a Power of Attorney Grant?
An active Power of Attorney can grant either one or many powers, depending on the type of form in question. Broadly speaking POAs can either cover medical or financial decision making.
In the case of a financial Power of Attorney, an agent can manage one or all of the following kinds of powers for you:
- Accessing and managing the principal’s bank accounts
- Controlling business transactions
- Buying and selling stocks and bonds
- Filing taxes
- Managing real estate and personal property
- Applying for public benefits
- Collecting pension payments
A Medical Power of Attorney, however, allows an agent to consent or refuse to certain types of healthcare treatment when you can’t yourself. A Healthcare Power of Attorney has some similarities with living wills. Yet, they differ significantly by allowing a person to make decisions for you rather than containing a detailed outline of your healthcare wishes.
What Can’t a Power of Attorney Do?
A Power of Attorney can allow another person to have a huge amount of control over your life and wellbeing. Nevertheless, there are a number of powers that an Attorney-in-Fact is not authorized to carry out at all. These include the following examples:
- Create, revoke or amend a will
- Vote on the principal’s behalf
- Make decisions after the principal is dead, such as funeral planning