Powers of Attorney, commonly referred to as POAs, are documents that name a trusted individual to act your behalf in financial, legal, or health care matters when you are unavailable or unable to act. The person acting on you behalf is called the agent or attorney-in-fact, and the person the agent is acting for is called principal or grantor. There are three main types of POAs: general POA, limited POA, and health care POA.
General Power of Attorney
This document is used in a variety of situations, including, traveling, and handling of the affairs of physically or mentally incapacitated persons. This POA allows the agent to handle different types of matters, including, but not limited to entering into contracts, banking transactions, entering safe deposit boxes, filing tax returns, and buying and selling property and real estate.
Limited Power of Attorney
This type of POA allows you to grant your agent power to do a limited number of tasks. The grantor specifies specific matters and transactions on which the agent has the ability to act on your behalf. For example, buying property in your name or handling the leasing and/or managing of real estate.
Health Care Power of Attorney
This POA allows your agent to make health care decisions for you. This DOES NOT limit your right to make these decisions for yourself while you are capable. This document is effective only when you are incapacitated.
Many websites and organizations provide standardized forms for POAs. Please keep in mind that different states, countries, and even counties require different forms. Please consult a lawyer regarding standard forms or to have a specialized form drawn up. There are many cases of agents using their power to steal the assets of vulnerable parties, because the grantor used standardized forms without any protective measures in place. As we always advise our clients: the three most important things in picking fiduciaries (agents, executors, trustees, etc.) are: 1. choose someone you trust; 2 give them the broadest possible authority or flexibility to deal with whatever might arise; and 3. choose someone you trust.