Estate Planning

What is a power of attorney?

A power of attorney is a document authorizing someone else (agent) to act on your behalf. The purpose of giving someone such a power is to enable the agent to act on your behalf when you cannot act for yourself.

Who can create a power of attorney?

In general, any individual over 18 years of age, a resident of the state in which it is created, and legally competent.

What are the formalities of signing a power of attorney?

Requirements vary from state to state, but generally a simple notarization or signing in the presence of witnesses.

Who may act as an agent under a power of attorney?

In general, an agent may be anyone who is legally competent and over the age of 18. Usually, it is a family member such as a spouse or a child.

What is the difference between a general and a limited power of attorney?

A general power of attorney authorizes an agent to do almost everything on one?s behalf which one could do for oneself. A limited power of attorney authorizes an agent to perform only certain acts specifically listed in the document. When does a power of attorney become effective? It can be made effective at the time of signing or it can become effective at the time of one?sincapacity.

How does a power of attorney terminate?

Death revokes a power of attorney. Power of attorney can also be cancelled by signing a revocation.

Must third parties honor a power of attorney?

Not necessarily. A good number of banks will require one to complete their own forms to authorize an agent to write checks on one?s account and the IRS will not honor any power of attorney unless IRS Form 2848 is used.

What are the disadvantages of a power of attorney?

• Third parties may not recognize your power of attorney
• It can be difficult to revoke a power of attorney
• The agent can reach your assets without court approval or supervision

What options are available for managing property when a person becomes incapacitated?

• A durable power of attorney
• A court-supervised proceeding referred to as a guardianship or conservatorship
• A living trust where assets are funded into the living trust

In regards to health care, is a durable power of attorney recommended?

Yes, it is important to have a durable health care power of attorney, sometimes called a health care proxy or advanced health care directive. It allows your agent to make a number of health care decisions on your behalf. Often this is accompanied with a living will or a physician's directive that can cover the issue of remaining on life support systems under varying circumstances.

SOURCE: Search-Attorneys.com