The Importance of a Power Attorney

What will you do in the event you cannot take care of yourself? A power of attorney prepares you for that situation.

Elderly couple walking along the beach

What is it?
In the event that you cannot make decisions for yourself, a Power of Attorney (POA) gives someone else the authority to make those decisions for you. Investopedia specifically defines it as, “a legal document giving one person (the agent or attorney-in-fact) the power to act for another person (the principal). The agent can have a broad legal authority or limited authority to make legal decisions about the principal’s property, finances, or medical care.” [1]

Who should get it?
There are several walks of life that can benefit from a POA, such as retirees, those of an advanced age, and military personnel. Overall, if you are at risk of illness or disability that may render you unable to manage your finances, or if you are typically unavailable to sign legal documents, a POA allows you to share your authority with another person [1].

Who should I choose as my guardian?
This is one of the most important decisions when it comes to a POA, as this person will have access to your finances, your house, and most importantly, your health. Choose someone who you wholeheartedly trust, such as a child or a spouse.

When is the right time to assign a POA?
To first create a power of attorney, you have to be of sound mind and body, since POAs act as a preparation measure for when that is no longer is true. Theoretically, everyone would have a POA, in the event of an accident. However, most couples sign a POA while they are planning for their later years in life, around the time with they consider creating a will. [2]

When will it take effect?
The purpose of a POA is to ensure that you are taken care of in the event that you can no longer take care of yourself. Whether the situation be physical, such as falling in to a coma, or mental, such as suffering from severe mental illness, a POA will take effect when you are verifiably (through a lawyer or a doctor) unable to make decisions for yourself [2].

Why should I have one?
A power of attorney permits another person to perform specific legal acts on your behalf. This document can allow another person to make decisions regarding finances, healthcare or the care of your children. As well as allow access to operate a bank account, buy and sell property, or change investments.

 

Sources:

[1]. Power of Attorney, Investopedia
[2]. What Is a Power of Attorney? (POA), LegalZoom