What is a Power of Attorney (POA)
A Power of Attorney is a legal document that gives an individual or organization, referred to as your attorney-in-fact or agent, permission to act on your behalf if and when you are no longer able to do so. Based on the type of POA, this may give the agent the power to make financial, business, medical, real estate, insurance decisions and much more.
There are four types of POA and each covers different scenarios that may arise:
- General Power of Attorney
- Special Power of Attorney
- Health Care Power of Attorney
- Durable Power of Attorney
A General POA gives the agent broad authorization to act on your behalf when you are absent or incapable of acting. It may also cover unique situations that you specify. Special Powers of Attorney are typically used in short-term situations to grant an agent permissions to act on your behalf. This may include giving a business partner power to make financial decisions in your absence, giving a family member the ability to make real estate decisions while you are away on active military duty and more. A Health Care POA gives an individual the power to make any health or medical decisions on your behalf in the event that you are incapable. It is often paired with a Living Will to provide guidance to the agent in the event that difficult decisions need to be made. A Durable Power of Attorney can be any of the above powers of attorney with the difference that it stays in effect should you become mentally incapacitated. Typically, this state must be confirmed by a doctor and you can specify which doctor you would like to do so.
Who needs a Power of Attorney
Simply put, if you wish for an individual or organization to make legal decisions on your behalf, you need a Power of Attorney. A few common reasons for setting up a POA are:
- Overseas Military Deployment
- Regular Absence Due to Travel
- Upcoming Surgery