A power of attorney designates an individual, group of individuals or organization to make legally binding decisions on your behalf. Powers of attorney safeguard your assets and your life when you are not able to handle your own economic or health affairs. Creating a power of attorney is also one of the most ardent processes, as it has far-reaching effects. Contemplate these three important factors before you draw up your power of attorney.
Your power of attorney goes into effect when you become unable to perform a certain task or at your incapacitation. You also have the ability to set further restrictions on your agent. You may only need your agent to take care of a specific financial matter while you are out of the country, or you may need your designee to act on your behalf to make healthcare restrictions. Decide the scope of your agent’s abilities ahead of time. Think clearly about why you need a power of attorney, including unexpected circumstances, and frame any restrictions around those considerations. You can also draw a general power of attorney that grants your agent decision making power for all financial and healthcare matters.
Each state has specific laws regarding the signatory and usage of a power of attorney. Go over these laws carefully with an attorney and with your agent. Some states allow for reparations in the event of even unknowingly misusing a power of attorney. Other states also name a power of attorney the beneficiary of all financial accounts upon your death. If you live in one of these states and you do not want your power of attorney to have this designation, you need to discuss further legal documentation with your attorney. Make sure that your agent understands and is willing to exercise all legal requirements, including record keeping, before signing a power of attorney.
Your agent or acting attorney is by far one of the most crucial decisions that you make before you complete your power of attorney. Though it may be difficult to choose between people in your life, especially children, give careful consideration before giving this legal authority to more than one agent. If more than one person is your agent, internal turmoil could occur when quick and effective decisions need to be made. This could delay the execution of important financial or end of life matters. Make sure that you trust your power of attorney to act in accordance with your wishes.
Though a power of attorney is prevalent among the aging, there are many reasons that people need a power of attorney beyond healthcare needs. A power of attorney protects your financial wellbeing when you are unable to make your own decisions clearly. Even if you do not perceive any specific circumstances, creating a general power of attorney safeguards you and your loved ones when the unexpected occurs. Give careful thought to these considerations when you discuss a power of attorney with your lawyer.