There are a variety of legal documents that can be signed when needed. One of the most popular and common documents is a Power of Attorney (POA). A POA allows a principal to designate another person known as the “agent” or “attorney in fact” to act on the principals’ behalf to make decisions on behalf to make decisions on specific matters. The agent does not have to be an attorney, it can be anyone that is over the age of eighteen that is trusted by the principal.
Certain circumstances can trigger the need to delegate a power of attorney for anyone over the age of 18; such as physical or mental incapacitation due to an injury. However, the most common time to establish a POA happens once someone enters retirement age or if an individual faces serious, long-term health issues and is concerned that they will not be able to make decisions on their own in the future.
A power of attorney is often used to ensure that the principals’ wishes are directly carried out especially if that individual is no longer able to complete tasks without assistance. A Power of Attorney can also be enacted to handle financial decisions to ensure the well-being and care of the principal.
There are several different POAs that each has a different responsibility that can be delegated when needed. The following are just a few of the different types of powers of attorney that can be signed.
When a conventional POA is executed, it is followed until the individual becomes mentally unable to make coherent decisions. Such a determination as to the inability to make such decisions often requires a doctor’s diagnosis and then the power of attorney is enacted. When creating a conventional POA, it is important to state what authority you are giving your agent and the circumstances under which the agent’s power to act becomes effective. The scope of authority granted to the agent is entirely determined by the principal and can be as broad or narrow as the principal deems appropriate.
A durable POA is enacted for a lifetime unless it is canceled by the creator (principal). A durable POA should specify that the agent’s power should stay in effect under any circumstance. A durable POA is one of the most popular types because the agent can efficiently manage all of the affairs of their client.
Springing POAs are used when a specific event happens in someone’s life and is commonly used when someone becomes incapacitated. As a springing power of attorney, it is essential to pay attention to any of the issues that may arise, and the agent must be able to identify triggering events as they happen.
Also known as a durable power of attorney for healthcare decisions or a healthcare proxy, a medical POA is the combination of springing and durable POA. A medical POA takes effect under specific conditions. If the principal holder of the POA is of conscious and of sound body and mind, the medical POA is not activated. Once the primary holder is under medical duress or a condition stated in the document that triggers the agent’s authority, the POA is activated and the agent will be able to commence acting on behalf of the principal.
A Power of Attorney for Property is similar to a Power of Attorney for healthcare decisions; however, there are nuances with a power of attorney for property. A power of attorney for property can be used to designate an agent to act in the place of the principal for a variety of financial tasks. An example of such is a client requesting their attorney attend a real estate transaction on their behalf because the client cannot attend the closing. The client (principal) signs a power of attorney for the limited purpose of having the agent sign the closing documentation on their behalf at the closing. The power of attorney, in this case, is not durable because it was for a limited purpose and once the closing concludes, the power of attorney equally concludes and is no longer effective.
However, at the same time, as noted above, often as people age and are concerned about their financial well-being if they become incapacitated for some reason, they will have a triggering event in a power of attorney for property and similar to a healthcare power of attorney, the triggering event occurs and the agent then acts on behalf of the principal until such time as it is determined that the POA is no longer necessary.