Power of attorney means that one person that is trusted by another will have legal authority to manage the other’s affairs. In this case, your attorney usually has power of attorney. These powers can be used for a short time or for a longer period, depending on the nature of the legal matter for which you are granting power of attorney.
The United States issues power-of-attorney forms in many legal situations. A general power of attorney document authorizes a friend, relative, caretaker or anyone else that you designate to handle financial decisions and/or personal matters when you are unable to do so yourself. If you become incapacitated from an accident or illness, having a general/non-specific power of attorney is a wise idea. You can name an attorney as your agent and give them broad powers of attorney to make decisions on your behalf.
Power of attorney should not be confused with services such as sports representation where an agent represents their client and gives financial and career guidance.
How To Grant Power of Attorney
Those signing off on giving someone power of attorney must do so before a notary.
The individual signing the legal document, known as the principal, gives this authority to someone else, called the agent or attorney, who can then conduct business or handle personal matters without consulting or involving the principal.
The power of attorney document must state specifically what actions the agent has been given permission to take and those which have been denied. This contract cannot be taken lightly as it could have an impact on many different areas of one’s life down the road—from buying/selling property or businesses, transferring bank accounts or stocks into another name, filing taxes and more.
Power of attorney is typically granted in estate law and in estate planning documents. This means that when a person becomes incompetent, they can indicate in writing who will be given power of attorney to manage their estate, as well as how and when to pass it on to their heirs.
This is better for everyone involved as the person to whom the estate belongs has given an objective third party control over their affairs. Any family problems that may result from one’s estate is rendered legally null as the attorney has the power to ensure the instructions for the estate outlined in the last will and testament are fulfilled. Furthermore, there are certain tasks an agent may carry out under these circumstances which an appointed conservator (in most cases a family member) cannot.
Other Areas of Law Where One Would Grant Power of Attorney
Beyond this there are other areas of law where one would need an attorney to be in charge of their finances and/or affairs. If someone is suffering from serious health problems, mental or physical, they may designate somebody have health care power—to make medical decisions for them should they become incapacitated.
This also applies to the area of tax law as well because it would then fall upon the agent to file taxes on behalf of the person who granted them power of attorney.
Some Deeper Considerations For Those Granting Power Of Attorney
When considering giving another party power of attorney, one should always think about how much authority they are willing to give away and what circumstance will cause them to revoke that power if necessary. Someone should only ever give a third party enough power that they can ensure their personal needs are met.
Power of attorney can be revoked through the use of a “springing power of attorney”. This type of trust states that it will not go into effect unless certain conditions have been fulfilled. For example, somebody might give their agent power of attorney to handle all business affairs only if they are in an accident or are in some way unable to manage their affairs themselves.
Power of Attorney Is Not Absolute
It is important to understand that even though agents have the power to sign legal documents for their principals, they are not authorized to represent the principal in all legal matters. The agent has no authority to alter estate plans, hire an attorney on behalf of the principal, or demand payment from the principal’s employer, nor can he/she produce a will for signature. The authority granted under a power of attorney only allows them certain aspects of management over an estate.