What is a Power of Attorney?
You may have heard the term before, but you might not know just what one is and how it works. Whether you are 29 or 90, a power of attorney can be a convenient thing for you to have. At this point, you may be asking, what is a power of attorney?
In its simplest form, a power of attorney is a legal document that gives another person the authority to takes certain actions on your behalf. Every state allows power of attorney documents, but each state follows its own rules for creating and using them. Enlisting the help of an attorney that is experienced in dealing with powers of attorney can save you money and heartaches in the long run.
The Components of a Power of Attorney
Agent. The person you designate to act for you is your “agent,” also called “attorney-in-fact.” You can give one or more persons the authority to take action for you.
Actions. You can limit your agent to handling one transaction for you, such as signing the documents for you to buy or sell a house while you are out of town, or you can give your agent broad, general powers to handle your business matters or financial transactions.
Duration. This power can be temporary, with a termination date specified in the document. For example, the power of attorney that gives your brother the authority to handle the purchase of your house for you can expire the day after the closing takes place.
Some powers of attorney do not have an expiration date because they are not limited to one financial transaction. A document like this is a permanent (i.e., until revoked) power of attorney.
Typically, a power of attorney (POA) is effective upon your signing and delivery to your agent. A “springing” POA is contingent on something happening in the future. Until that event happens, the agent has no power. If the event never happens, the agent never has authority to act for you. An example of a springing POA is one that only takes effect if you one day suffer a mental or physical incapacity, but it is critical that “incapacity” be clearly defined in the document itself and who will make the determination whether you are incapacitated.
Revoking a Power of Attorney
Do not make the mistake of thinking that if you sign a permanent power of attorney you can never “take it back.” You can always revoke a power of attorney at any time. You should terminate the power of attorney in writing, giving a copy to your agent and anyone with whom your agent was dealing on your behalf.
You do not lose the right to handle your own affairs just because you have signed a power of attorney. The document does not take any powers away from you. The paper only kicks in if you are unable or unwilling to do something for yourself. You can handle your own matters at any time.
Things to Consider About a Power of Attorney
Your agent. Trust is the single most critical aspect when selecting who will serve as your power of attorney. The person you choose cannot be a minor or someone who lacks legal capacity. For your protection, you should name someone who will act with integrity and not embezzle your funds.
Powers. You should only grant your agent the powers needed to complete the task for you. If, for example, you sign a POA for someone to handle the closing on your house, limit the document to that one transaction and do not give the person sweeping authority over all your financial matters.
If you have questions about whether a power of attorney is right for you, schedule a consult with estate planning and administration attorney Stephen Thienel today. Mr. Thienel has decades of experience assisting clients in assisting individuals with their estate plans throughout, Maryland, Virginia, and the District of Columbia.
This Blog/Web Site is made available by Stephen Thienel and Thienel Law, LLC for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney-client relationship between you and Stephen Thienel and Thienel Law, LLC. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state