Having financial power of attorney means having the authority to access and manage another person's monetary and/or property assets. As an agent with financial POA, you have the right to make certain kinds of financial decisions on behalf of the principal (as long as they are in his or her best interests). For example, your parent might give you the authority to pay bills, file taxes, make and manage investments, transfer money between different bank accounts, handle insurance claims, collect outstanding debts, sell or rent out property, or deal with retirement pensions and government benefit programs.
The duty of a power of attorney agent is to always act in the best interests of the principal.
Essentially, the difference between a "general power of attorney" and a "durable power of attorney" is that a general POA terminates when the principal is deemed to lack capacity, whereas a durable POA stays valid beyond that point.
Depending on the particular agreement, a power of attorney covers a broad or narrow set of responsibilities, usually related to financial and/or medical and caregiving matters.
So your parent may use it to grant you a comprehensive set of powers to help out while he or she is away from home for extended periods of time or needs your assistance due to other reasons, such as physical illness or disability.
A POA document is generally a written agreement between two people: (1) the principal (sometimes called the grantor) and (2) the agent (sometimes called the attorney-in-fact). The agent is the person appointed to act on behalf of the principal. So your parent (the principal) can grant you (the agent) certain powers of attorney.
Unlike most other types of POA documents, a springing POA agreement doesn't take effect until a specified date or a particular event takes place. For example, your parent may not want you to have any authority until he or she becomes incapacitated or turns a certain age.
A Power of Attorney is a designation given to someone who, with your permission, can make decisions for you. This is very helpful in the event you are ill or otherwise unable to make a decision or need help making future decisions. Setting up a Power of Attorney is an important part of any estate plan, and may require the help of a Maryland estate lawyer to ensure it has been done properly.
The individual who will be granted the specified powers is called your agent . Picking the right agent is extremely important. You will want someone whom you can trust to take on this important role. Some other points to consider are the person’s age, distance, health, and expertise with medical and financial matters.
They may find legal issues, inconsistencies, or other problems with your form. Once the document has been reviewed and any confusing or ambiguous language is taken care of, then the document can be properly signed, witnessed, and notarized.
If you’re ready to set up a power of attorney, the best way to do so is by consulting a professional. Unfortunately, consulting a professional costs more than doing it yourself. However, their advice could save you from making a decision that has unintended consequences that you later regret.
For instance, you may want to give someone access to your bank accounts so they can pay bills and deposit checks on your behalf. This can be very important if you become incapacitated.
If you move from one state to another, you should review your power of attorney documents to make sure they’re still in effect. You should consult a lawyer before making any power of attorney decisions to make sure you’re not giving up any powers you aren’t aware of.
A durable power of attorney is like a general power of attorney, except it continues to remain in effect after you become incapacitated. The person that is granted a power of attorney is known as an attorney in fact.
In theory, certain power of attorney situations may give the attorney in fact access to change beneficiaries on your financial accounts. This is another reason to be careful with the powers you give. Even so, a person that has power of attorney is supposed to act in your benefit interests.
Usually, this event is you becoming incapacitated. This way, the person doesn’t have power of attorney before you become incapacitated.
In general, a power of attorney has a fiduciary duty to act in your best interests. Unfortunately, this doesn’t always happen. It’s extremely important to very carefully select a power of attorney that you trust would do what you’d want them to do. General power of attorney. Durable power of attorney.
In the United States, a Power of Attorney enables a person to legally make medical, financial, and certain personal decisions (such as recommending a guardian) for another person. You may need to grant someone power of attorney if you are incapable of handling all or part of your affairs for a period of time.
Because the decisions that the person holding power of attorney makes are legally considered the decisions of the principal, it's vital that the agent be someone you trust absolutely and without question. Consider the following when thinking about possible agents: Consider how close the candidate is to the principal.
It often will not go into effect until the person who grants the power of attorney becomes incapacitated.
Gather witnesses. In some states it is necessary to have the signing of the document witnesses by one or two people. For instance, in Florida, a power of attorney document must be signed by two witnesses while in Utah, no witnesses are required.
If the person is already mentally incapacitated and did not grant power of attorney in a living will, it may be necessary to get conservatorship or adult guardianship . In most regards, the authority held by a guardian is similar to (but more limited than) those held by someone with power of attorney.
Have the power of attorney document notarized. Some states require the agent and the principal to sign the power of attorney document in front of a notary. Even if your state does not require notarization, notarization eliminates any doubt regarding the validity of the principal's signature.
If the power of attorney purports to transfer a power that cannot be transferred under the law, that part of the power of attorney is void. For instance, even if the principal and the agent agree, the agent cannot write or execute a will for the principal. Any such will is not valid.
In a power of attorney, you name someone as your attorney-in-fact (or agent) to make financial decisions for you. The power gives your agent control over any assets held in your name alone. If a bank account is owned in your name alone, your attorney-in-fact will have access to it.
Power of attorney dies with you. Once you pass away, the document is no longer valid and your will then controls what happens to your assets. Fund your revocable trust. If you fund your revocable trust during your lifetime, you may not need to use your power of attorney although you should still have one just in case.
Name an alternate. If your named agent dies before you or is incapacitated, you want to have a back-up who can act. Also, consider nominating a guardian and conservator in your power of attorney in case one is needed down the road. Read the document. This seems obvious, but clients often do not read their documents.
A durable power of attorney is effective when you sign it and survives your incapacity. A springing power of attorney springs into effect when you are incapacitated. A springing power of attorney seems more attractive to most people, but it is actually harder to use.
People tend to focus their energies on their wills and trusts, naming someone to serve as their power of attorney at the last minute. This is an important decision and not one that should be taken lightly.
The unfortunate answer is “yes. ”. Since he will have access to your financial accounts, he can access your funds and use them for his own benefit. The agent does have a fiduciary duty to use the assets only for your benefit or as you direct in the document.
Depending on the language of the power of attorney, your agent may be able to change the ownership of your bank accounts or change your beneficiary designations. This is a common scenario in second marriages.
Health and welfare lasting power of attorney. Use this LPA to give an attorney the power to make decisions about things like: your daily routine, for example washing, dressing, eating. medical care. moving into a care home. life-sustaining treatment. It can only be used when you’re unable to make your own decisions.
Use this LPA to give an attorney the power to make decisions about money and property for you, for example: 1 managing a bank or building society account 2 paying bills 3 collecting benefits or a pension 4 selling your home
This power of attorney allows the agent to do anything the principal could do.
Florida does not recognize a springing power of attorney created after September 30, 2011. A Springing power of attorney is one that does not transfer power to the agent until a future date.
In the state of Florida, two witnesses must sign the power of attorney. Identify two people who can be trusted to witness your signature. If you are incapacitated and the power of attorney is challenged in court, the witnesses may be called upon.
As noted above, Florida no longer allows a springing power of attorney. It must be stated that the power of attorney is to be durable or it will be invalid when the principal is incapacitated.
Unless it is "durable," your power of attorney will expire if your doctor or a court determines that you are incapable of making your own decisions.
Ambiguity can lead to legal complications. You must remove all such language before the power of attorney is executed. Even if you do not hire an attorney to look over the document, there are a few things you can do to make the document clearer.
You can terminate or revoke your power of attorney at any time. You can include a termination date in your power of attorney, and the powers will expire on that date. You can also specify in the power of attorney that a particular action will cause the power to terminate.