In life, situations may arise when you require someone to make decisions on your behalf, such as during illness, for financial partnerships, or to secure your children’s financial future.
Before someone can make legal decisions for you, you must create a power of attorney, which varies by state.
It’s often as easy as filling out a form and signing it with witnesses or a notary public.
Use this financial power of attorney form for financial matters and understand this document’s ins and outs before proceeding.
One can get power of attorney forms which are widely available, often from state websites, financial institutions, and hospitals.
What Is a Power of Attorney?
A Power of Attorney (POA) lets one person (the principal) authorize another person (the agent) to make legal decisions on their behalf.
The agent should be an adult and can be compensated.
Consider having alternate agents to avoid disputes. The agent must act in the principal’s best interest, or they might face legal consequences.
Know the Different Types of Powers of Attorney
Consider your reasons for a power of attorney. Do you need financial or healthcare decisions made for you or your children?
Is it for future incapacity or a temporary situation like travel?
Once you decide, choose the appropriate type of power of attorney, which can be combined or separate.
General Power of Attorney
Consider your needs for a power of attorney: financial decisions, healthcare choices, future incapacity, or temporary situations like travel.
Once you decide, choose the appropriate type – some can be combined, others separate.
Financial Power of Attorney
Create a financial power of attorney for someone to manage your financial matters.
They can handle real estate, bank accounts, retirement plans, and tax issues.
However, this agent can’t make medical decisions. You can grant broad or limited authority with special instructions.
Health Care Power of Attorney
For healthcare decisions during incapacity, establish a medical power of attorney, often part of a healthcare directive, including a living will and naming a healthcare agent. It’s also known as an advance directive.
Choose a trusted agent who knows your wishes.
When Does an Agent Have Power To Act?
The timing of your agent’s authority depends on the type of power of attorney.
A durable one is effective upon signing and stays in effect, even if you become incapacitated, ending at death or by revocation.
A springing power of attorney activates on a specific event, often incapacity.
To revoke a power of attorney, write it down and notify your agent and involved parties.
Finalizing Your Power of Attorney Documents
In many states, a power of attorney is valid once properly signed, often with witnesses or notarization.
Some states may need the agent’s acknowledgment before acting.
Since it can take effect immediately, store your documents securely, like in a fireproof safe or safe deposit box.
Where You Can Get Power of Attorney Forms
Power of attorney forms are widely available, often from state websites, financial institutions, and hospitals.
While you can create your own without a lawyer, online forms vary in quality.