If you’re ever incapacitated or away from home for a while, you’ll need to arrange a power of attorney so someone else can handle your affairs.
Most of us have heard the term “power of attorney,” but few of us have a clear idea of what it means. As a savvy consumer, however, you should make sure you understand the concept, just in case you need to assign someone the right to handle your personal affairs someday.
In this article, we’ll take a look at the basics.
POA, by Definition
A power of attorney (POA) allows you to assign someone else the authority to act on your behalf in legal and financial matters, and sometimes health matters as well, when you cannot do so yourself for some reason.
A POA requires a formal legal document in which you, the principal, sign over these rights to your chosen agent, or Attorney in Fact (AIF). Your AIF can be just about anyone, though a lawyer or family member is the best choice.
Most people transfer their POA when they become incapacitated, but you can also set up a POA agreement if you need to be away from home for an extended period: for example, while serving in the military, or working overseas.
If you have a POA, things can continue to run smoothly in your absence from your everyday affairs, whether that absence is long or short term, voluntary or otherwise.
Choosing an AIF and Moving Forward
Choosing someone to fill in for you may not be an easy decision. Many of us have heard horror tales of AIFs abusing their POAs; so clearly, trustworthiness is crucial. You AIF should also live near you (ideally in the same state), and must be over 18 years of age and of sound mind.
Once you have an AIF, decide what you want them to handle. You don’t have to assign all your rights to them; for instance, if you expect to be overseas for a while, you can give them the power to make business decisions while you’re away, but retain control over your personal finances.
Next, draft the document itself. You can use a form from a legal kit or the Internet, and just fill in the blanks. However, it’s better to spend a little money and have an attorney prepare it, because they know all the legal niceties and required bases to cover…and it’s more likely to stand up in court.
Next, decide whether you want your POA to take effect immediately, or whether something must happen to trigger it: say, when you leave the country, or if you become incapacitated in some way.
The final step is to have the relevant documentation witnessed, notarized, and filed with the local county courthouse. Once you’ve done that, your Power of Attorney is in place, and you’re covered.