At any moment, you may become incapacitated and unable to care for yourself. Whether these are temporary conditions or linger, other aspects of your life need some form of continuity. A power of attorney allows you to decide who will have the authority to perform these functions for you.
Familiarize yourself with what a power of attorney can do and the function it serves in your overarching estate planning efforts.
What is a power of attorney?
When you grant someone else the right to act on your behalf, they need to do so with full legal authority. A power of attorney bestows this on whomever you designate and affords them the rights you designate. Most often, a power of attorney serves as your stand-in for situations when you cannot act due to absence, illness or injury.
What type of power of attorney do you need?
There are three main categories of power of attorney that act in the same general way but under various rules and regulations. A limited power of attorney grants someone temporary authorization to take action on your behalf for a specific purpose. For instance, if you cannot attend a property closing, you can designate someone else to sign on your behalf.
A general power of attorney designates another to oversee and attend to your financial affairs. This power ends when you become incapacitated unless you give the person a durable power of attorney. This allows the person named to handle your financial and personal affairs until you recover or die.
A power of attorney allows you the opportunity to designate a trusted person to represent you when you are at your most vulnerable.