A Complete Guide on Powers of Attorney Every Person Must Know
People often lose their ability to make decisions, whether financial or health, as they age. Respecting their independence and autonomy becomes a tough task, however, it’s also futile to secure their future. This security is created through what is called a Power of Attorney. The role Power of Attorney can be held by you, any other member of your family, or a third party member who will attach the right to make decisions on behalf of the individual who either needs help with making decisions or who needs decisions made for them altogether.
What is a Power of Attorney (POA)?
The Power of Attorney is a legal document that gives another person the authority to enter into certain agreements on your behalf. The main advantage of making a Power of Attorney is that it allows the person giving this power the opportunity to choose someone this person trusts as his or her representative to speak on his or her behalf in whichever desired situations. Additionally, a Power of Attorney can be used to have an aid in managing a person’s financial, health, and personal choices. While there are cases where young people also execute a Power of Attorney to protect their health, financial, and/or individual decisions, it is more commonly seen in elderly or disabled individuals.
Benefits of a POA:
The POA is regarded as a significant document suited for various situations:
- When an individual is reaching an advanced age and wants to ensure their own election of a representative will be appointed for managing their affairs.
- In a situation of divorce.
- When you are diagnosed with a severe life-threatening disease that could possibly leave you incapacitated.
- Business owners, in the event you become incapacitated or disabled.
- Becoming physically disabled.
- International travel.
The different types of Power of Attorney:
Financial Power of Attorney: where the legal right of the individual is given to someone else to take the authority of one’s financial matters. Simple powers include paying the bills of the persons or depositing the social security checks. A financial POA can also empower someone to take control of investment management, selling and maintenance of assets, and gaining access to bank accounts.
Maximum safeguards are provided by the individual executing the POA as the individual can work with the attorney to create the parameters they want the agent to have, leaving one with comfort that the agent does not have unlimited control with their finances.
A Durable Power of Attorney: once signed, becomes effect immediately. This type of POA is idea for those with serious health issues or those of advanced ages. However, it is vital to remember that a Power of Attorney cannot be given to someone after one becomes mentally incompetent. It must be executed while one is still of their proper mind.
Springing Power of Attorney: different from a Durable POA in the sense that it becomes effective only after the occurrence of a particular event, such as an illness or accident and remains ineffective otherwise. This is more ideal for an individual who desires to maintain control of their personal and/or financial decisions until they become physically or mentally unable to do so.
Medical Power of Attorney: these are created for the sole purpose of having someone make medical decisions on your behalf once you have become incapacitated due to a medical situation. A Medical POA can establish one’s desires as to end of life decisions before hand, or it can give an agent the authority to make a decision based off what the agent believes the incapacitated individual would have wanted.
Mental Capacity Required for a Power of Attorney:
An individual is required to be “mentally competent” to legally execute a power of attorney. This requisite mental capacity for the POA is established with the presence of a witness during the signing of this document, along with the witness’s signature.
Modifications in the Power of Attorney form:
A mentally competent person can revoke their formerly executed Power of Attorney at any time, and can also choose a different agent for the same power of attorney. However, the same requirements stand for any modifications as required for the execution of an initial Power of Attorney.
The attorneys of the Nashville-based law firm, Lackey & Lackey, PLLC, can draft a reliable power of attorney to ensure you and your loved ones will be taken care of. These attorneys understand the rights and duties of an agent, the formal requirements for creation of a Power of Attorney, including revocation, as well as the various legal complications involved with creation and execution of a Power of Attorney. They can also discuss with you who is the most appropriate person to appoint as your Power of Attorney in each situation discussed above. Contact us today to set up your free consultation.