What is a Power of Attorney?
A Power of Attorney (POA) is a standard legal document used to allow one party to act for another party. A legal relationship is created between the two parties, in which one is the principal and the person they appoint is the agent. A POA defines the specific powers the principal gives to their agent. Those powers can be very limited or quite broad. For example, if someone is selling their home, but is unable to attend the closing, they can give someone else the power to sign the deed in their absence.
What is a “durable” Power of Attorney?
Most durable powers of attorney, give the agent for the principal the ability to do almost anything they could do. The word “durable” means a power of attorney (the legal document created between the principal and agent) will still be active if the principal becomes mentally incapable. The powers given to the agent will remain in effect even when the principal is unable to provide them with instructions. Many times, POA documents are durable unless otherwise stated.
What does this mean for me?
If you are the principal and give someone a POA, you will still have the right to control your money and property. However, you are giving your agent the capacity to access your money. Your agent is not empowered to take or use your money without your permission. There is a risk that a dishonest agent might steal your money, though. Consequently, it is essential to appoint an agent you trust. Before signing a power of attorney, you should review your agent’s duties.
There is a risk that your agent may abuse their power without your knowledge or approval. Because an agent can use the POA to access your bank account or sell your property, do not give your POA to anyone you do not trust with your money or property. It can be quite challenging to get back money or property taken by your agent.
If you have not given the POA to anyone, you can revoke it by simply destroying the document. The POA is not useful to the agent unless the agent has it and it has been given to financial institutions or others so that they are led to believe you want the agent to act on your behalf.
If the POA has already been given to your agent, an institution, or has previously been recorded, you can execute a legal document revoking the POA. Then you can supply a copy of the Revocation to the parties involved so that they know the POA is no longer valid.
Why do you need a power of attorney?
A POA can be quite useful for you and your family. If you become unable to handle your own affairs as a result of accident, illness, or even absence, the POA gives your agent the power to manage your affairs as you would like them handled. Don’t wait until you’re incapacitated to get started on a POA arrangement. Contact a lawyer who focuses on the POA process and schedule a consultation.