What is a Power of Attorney & Do I Need One?
A power of attorney (POA) is a legal document that grants one person, known as the "principal," the ability to authorize another person, known as the "agent" or "attorney-in-fact," to act on their behalf in legal, financial, or personal matters. The principal delegates specific powers and responsibilities to the agent, who can then make decisions and take actions on the principal's behalf.
The scope of authority granted in a power of attorney can vary widely, depending on the specific wishes and intentions of the principal. Some common powers that can be included in a power of attorney are:
Financial matters: This may include managing bank accounts, paying bills, filing taxes, buying or selling property, and making investments.
Legal matters: It can authorize the agent to represent the principal in legal proceedings, sign contracts, and make legal decisions.
Healthcare decisions: A separate type of power of attorney called a healthcare or medical power of attorney grants the agent the authority to make medical decisions on behalf of the principal if they become incapacitated or unable to communicate.
It's important to note that a power of attorney is a legally binding document, and the agent has a fiduciary duty to act in the best interests of the principal. The power of attorney can be limited in duration, allowing the agent to act only for a specific period or until a specific event occurs. Alternatively, it can be durable, meaning it remains in effect even if the principal becomes incapacitated.
Creating a power of attorney typically requires drafting a document that meets the legal requirements of the jurisdiction in which it will be used. It's advisable to consult with an attorney to ensure that the power of attorney document accurately reflects your intentions and complies with applicable laws.