What is a Power of Attorney (P.O.A.)?
A Power of Attorney is a document where you appoint a person or organization (known as your “agent”) to manage your affairs. There are different types, with each giving your agent a different level of control. Since aging, getting sick or hurt or just daily life commitments happen to everyone, you need a P.O.A. in place for when the unexpected occurs. It’s important to understand what a P.O.A. is and how it can take care of business, when you can’t. P.O.A.s are only valid if you are mentally competent when you sign it; so, if you think your mental competency could be questioned, a doctor should verify it in writing.
General P.O.A. - A general P.O.A. gives extensive powers to your agent to act on your behalf; including, handling financial and business transactions, settling claims, operating businesses, and hiring professionals. A general P.O.A. is an effective tool if you will be away and need someone to handle matters, or when you are physically or mentally incapable of managing your affairs. A general P.O.A. is a key part of an estate plan which can eliminate the need for a court-appointed guardian.
Durable P.O.A. - A durable P.O.A. ensures your P.O.A. stays valid if you become mentally incompetent because of an illness or accident. This is a P.O.A. with a durability provision to keep the P.O.A. in effect. You might also sign a durable P.O.A. to prepare for the possibility that you may become mentally incompetent because of age, illness or injury.
Limited P.O.A. – The powers an agent has can be limited by signing a limited P.O.A. This is often used when one can’t handle certain affairs due to other commitments or health reasons. Selling property (personal and real), managing real estate, collecting debts, and handling business transactions are some of the common matters specified in a limited P.O.A.
Health Care P.O.A. - A health care P.O.A. gives your agent authority to make medical decisions for you if you can’t make decisions on your own. This is often combined with a Living Will giving direction on your care at the end of life but does not have to be.