A power of attorney involves at least two people, the first being the Principal – the one granting the power of acting on their behalf – and the agent, or attorney-in-fact – the one to whom that power is being granted.
Standard instances for the use of power of attorney include the principal’s disability or illness, or when the principal cannot be present to sign required legal documents for financial transactions.
Careful and prudent thought should be given to who will be appointed power of attorney, as the agent will have legal authority to determine how to carry out issues such as the principal’s property, finances and medical care. The agent may be filing taxes, selling property or assets, accessing bank accounts and signing checks. The agent need not be an attorney, and could be someone you trust, as in a family member or friend.
There are two main classes of power of attorney. One is a general, or limited, power of attorney and the second is a durable power of attorney. The limited power of attorney authorizes the agent to perform on behalf of the principal in only specific matters or events, and may also be limited to a finite term, as for two years.
A durable power of attorney continues control of health care, property, financial matters and other legal circumstances as specifically dictated in the agreement, including once the principal becomes mentally incapacitated.
Some authority may not be conveyed by a power of attorney, including matters concerning a will, such as making, revoking or amending a will, marriages and voting.
As in most legal instruments, the power of attorney rules and restrictions will vary from state to state, so a generic downloaded form may not be suitable in most cases. It will often require the signatures of the parties to be notarized.