What Is a Power Of Attorney and What Does It Do?
A power of attorney (POA) is a legal document that gives another person the authority to act on your behalf. This can be regarding financial matters, healthcare decisions, or other legal matters. A POA can be very specific or it can give the person broad powers. It is important to understand what your POA does and does not allow the person to do. You should also have a clear understanding of what your wishes are and communicate them to the person you are granting POA to.
Main Types of Power of Attorney
- Durable: this type of POA remains in effect even if you become incapacitated
- Springing: this type of POA only goes into effect when you become incapacitated
You can revoke a POA at any time as long as you are of sound mind. To do so, simply notify the person in writing that you are revoking the granted power of attorney.
There are many reasons why someone would want to grant power of attorney to another person. For example, if you are going to be out of the country for an extended period, you may want to grant power of attorney to someone to handle your finances in your absence.
Or, if you are unable to make decisions due to a medical condition, you may want to give someone power of attorney so they can make decisions on your behalf.
Other Types of Power of Attorney
There are also different types of POAs for different purposes. For instance, there is a financial power of attorney and healthcare power of attorney. A financial POA would give someone the authority to handle your finances, while a healthcare POA would allow them to make medical decisions on your behalf.
How Do You Choose?
When choosing someone to grant power of attorney to, it is important to have someone you trust implicitly. This person should be responsible, level-headed, and willing to act in your best interests. Keep in mind, this is a big responsibility and not everyone is up for the task.
You may also want to consider choosing someone who lives close by. This way, issues that need to be immediately dealt with can easily be taken care of.
What Are the Benefits of Granting Power of Attorney?
There are many benefits to granting power of attorney to another person. For one, it can give you peace of mind knowing that your affairs are in good hands. It can also provide you with assistance when you are unable to take care of things yourself.
In addition, by granting power of attorney to someone, you can avoid the expense and hassle of going through the court system to have a guardian appointed. This is especially important if you become incapacitated and are unable to make decisions for yourself.
What Happens if You Die Without a Power of Attorney in Place?
If you die without a power of attorney in place, your loved ones will have to go through the court system to have a guardian appointed. This can be a long and expensive process. In addition, it can be emotionally difficult for your loved ones as they navigate the legal system during a time of grief.
It is important to note that a power of attorney is not the same as a will. A will dictates how your assets will be distributed after you die. A power of attorney, on the other hand, gives someone the authority to act on your behalf while you are alive.
While it is not required by law, it is generally a good idea to have both a power of attorney and a will in place. This way, you can be sure that your affairs will be handled the way you want them to be, even if you are no longer able to do so yourself.
If you have any questions about whether or not you need a power of attorney, or if you are unsure of how to go about setting one up, you should speak with an attorney. It can help you understand the process, and ensure that everything is done properly.
Legally Managing Someone Else’s Money
While it may seem like a daunting task, there are many benefits to legally managing someone else’s money. By doing so, you can provide them with assistance and peace of mind. The expensive and emotionally difficult process of going through the court system can also be avoided.
Revoking A Power of Attorney
A power of attorney can be revoked at any time, as long as the person who granted it is still alive and has the mental capacity to do so. To revoke a power of attorney, you simply need to notify the person who has been given this authority. You can do this in writing or verbally.
Once you have revoked a power of attorney, the person who had this authority will no longer be able to act on your behalf. If you have any questions about revoking a power of attorney, or if you need assistance doing so, you should speak with an attorney.
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Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.
