Why Do I Need a Power of Attorney?

In the legal field, there are numerous different legal devices utilized. Powers of attorney are among them. In this paper we will look at the power of attorney from an overview. We will also examine powers of attorney as they typically apply to estate planning and elder law.

Empowering an Agent

A power of attorney essentially involves two different operative parties. The individual that is creating the power of attorney is called the grantor or principal. The grantor of the power of attorney selects an agent or attorney-in-fact. The attorney-in-fact can act on behalf of the grantor.

Don’t be fooled by the term “attorney-in-fact.” There is no reason why you cannot select someone who is an attorney to act as your agent. However, you do not have to choose someone who is a practicing lawyer.

The attorney-in-fact must be an adult in the eyes of the law who is mentally competent. He or she must be willing to act as the agent. Generally speaking, these are the only requirements.

Different Types of Powers of Attorney

There are different types of powers of attorney that are used for different purposes. This is one of the reasons why you would want to discuss your unique situation with a licensed attorney before executing a power of attorney.

You would want to make sure that you are using the appropriate type of POA.

General Power of Attorney

One type of power of attorney is a general power of attorney. With this type of POA the grantor is giving sweeping powers to the agent. The best way to understand the powers that are granted to an agent via a general power of attorney is to imagine the legally binding actions that you can take on your own.

When a general power of attorney is in place, the agent or attorney-in-fact has this same type of latitude. He or she can make sweeping decisions of all kinds on behalf of the grantor.

You would want to use a general power of attorney if you did in fact need someone to act for you on a comprehensive basis.

Limited Power of Attorney

You may need someone to act in your behalf on a limited basis. This can be done through the execution of a limited power of attorney.

What is meant by the term “limited basis”? For example, let’s say that you are incapable of getting around because you have been in a car accident. You are a busy person, and you routinely sign business oriented documents on a day-to-day basis.

You could give your sister a limited power of attorney to act in your behalf until you get back on your feet.

A limited power of attorney can also be used to give someone the power to make a single transaction in your behalf. Suppose you are purchasing a dream retirement home in Hawaii. You are busy in Indianapolis conducting important business.

On the day of the closing you are going to be meeting with your most important client, and there is simply no way that you can get to Hawaii.

Your sister lives 15 minutes from the attorney’s office in Maui. You could give your sister limited power of attorney to consummate this single transaction in your behalf.

Durable Powers of Attorney

If you think about accounting for the possibility of becoming incapacitated as a senior citizen, you may connect the dots and see how powers of attorney could be useful. You could name agents to act in your behalf if you become incapacitated.

The problem is that standard powers of attorney are no longer in effect upon the incapacitation of the grantor. This is why durable powers of attorney are used in the elder law field.

A durable power of attorney will remain active even if the grantor becomes incapacitated. These documents are highly recommended. This is because a guardian can be appointed by the state to act in your behalf if you don’t name your own hand-picked decision-makers in a legally binding document.

Attend a Free Seminar

The incapacity planning component is an important part of a comprehensive estate plan, but many people overlook it when they don’t understand all the facts. If you would like to obtain a solid foundation of information about estate planning so you can take all the right steps to protect yourself and your family, we can help.

We offer free seminars on an ongoing basis, and you qualify for a free initial consultation if you attend one of these sessions. To see the schedule, click this link: Naples FL Estate Planning Seminars.

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