A power of attorney is a document that grants various powers and responsibilities to a trusted third party or “agent” who can act on your behalf. This document usually only allows an agent to make non-medical decisions on your behalf. A power of attorney can be a valuable planning tool that lets you decide in advance who will manage your affairs should you become unable to do so. It can also be a way to avoid expensive guardianship or conservatorship proceedings if you become disabled or incapacitated.
Acting as an agent under a power of attorney is a big responsibility and it isn’t something everyone can take on. It is possible to resign or refuse the position.
A power of attorney may seem like a simple document, but there are several important decisions that need to be made when creating one. From whom to appoint to what powers to grant, care and consideration should be put into each choice.
While everyone should have a durable power of attorney that appoints someone to act for them if they become incapacitated, in some circumstances it is not enough. In these cases, a revocable trust can help.
When you need someone else to care for money or property on your behalf, that person (or organization) is called a fiduciary. A fiduciary is a person or entity entrusted with the power to act for someone else, and this power comes with the legal obligation to act for the benefit of that other person.
I reviewed a POA recently for a new client. I was shocked to see a provision in the POA that was completely inappropriate for this client. This particular POA prohibited the making of gifts in excess of the annual gift tax exclusion.
For most people, the durable power of attorney is the most important estate planning instrument available -- even more useful than a will.
A general durable power of attorney (GDPOA) and a medical power of attorney (MedPOA) are two of the most important estate planning documents you can have, but in some instances they may be useless if they don't comply with the federal privacy law.
While you should not need a separate will or trust for a second state, your power of attorney and health care proxy may be a different story. Financial and health care institutions are used to the documents used in their states and may refuse to honor out-of-state documents. In the case of health care proxies, other states may use different terms for the document, such as “durable power of attorney for health care” or “advance directive.” (And the people reviewing your power of attorney or health care proxy may not be well versed in constitutional law.)
Unmarried couples need health care documents and Powers of Attorney in order to care for each other in the event of incapicity.
In a recent Florida case, Bank of America rebuffed an agent's request that funds be withdrawn from the principal's account. The agent fought back in court and just won a $64,000 judgment against the bank.
You need a POA, if you are an adult. It doesn't matter what stage of life you are in. If you are an adult, you always should have a power of attorney, according to Benefits Pro...