Power of Attorney – MVP Law Group
Preparing a Power of Attorney is specific to an individual’s particular situation and needs; therefore we have assembled a brief Q&A regarding the basics related to the preparation of your Power of Attorney.
»What is a Power of Attorney (POA)?
»What does a POA do?
»Should I execute a POA?
»Can I revoke a POA?
»What types of things can a POA cover?
»What are the differences between a general, limited and durable
What is a Power of Attorney (POA)?
A Power of Attorney is the grant of authorization to act on someone else’s behalf in a legal or business matter. The person authorizing the action is deemed the Principal (grantor), and the person authorized to act is the Agent (Attorney-in-Fact, or any competent adult). It is the creation of a fiduciary relationship between an Agent and a Principal, where the Agent must be completely honest and loyal to the wishes of the Principal in their dealings. A POA normally ends when the Principal dies; however, a POA can end upon the Principal’s choosing.
What does a POA do?
A POA allows an individual who may be elderly, sick, planning to be out of state or the country, or otherwise unable to act on their own behalf to authorize another to act in their best interests in regards to their property and business transactions.
Should I execute a POA?
If any of the above reasons apply to your situation, you should execute a POA. Additionally, if any of the above situations were to occur, your family members would have to proceed to court in order to gain permission so that they could act on your behalf to carry out specific transactions. An executed POA will hold up in Court, and in the long run it will save you and your family time and money.
Can I revoke a POA?
A POA can be revoked at any time, and the POA should clearly provide in its language that the Principal may revoke it.
What types of things can a POA cover?
A POA can cover a wide variety of things, mainly dealings with property and finances. The principal may give the agent the authority to act in their behalf in regards to the following types of transactions:
- Real property transactions
- Tangible personal property transactions
- Stock & Bond transactions
- Commodity & option transactions
- Banking & other Financial institution transactions
- Business operating transactions
- Insurance & Annuity transactions
- Estate, trust & other beneficiary transactions
- Claims & Litigation
- Personal & Family Maintenance
- Benefits from Social Security, Medicare, Medicaid, or other Government programs or Military service
- Retirement plan transactions
- Tax matters
What are the differences between a general, limited and durable POA?
A general POA gives the Agent the full power to act on behalf of the Principal and is effective upon signature, or at a designated time and will remain effective until the Principal becomes incapacitated, disabled or incompetent.
A limited POA may only encompass certain types of transactions and/or may be limited in duration. It may involve the selling of real estate, the closing of a bank account, or it may be valid for the time that you are on vacation outside of the country, etc.
A durable POA is effective upon signature or at a designated time and will continue to be effective if the Principal becomes incapacitated, disabled or incompetent. Life is full of unexpected events, so why not have the necessary protections in place in case something where to occur. Having an executed POA in these current times is a protection that one should not be without. Certain situations could occur, like unexpected trips outside of the U.S., possible deportation proceedings, incarceration, or week-long destination trips on cruise ships, which would make it extremely difficult for you to conduct business transactions, handle bank accounts closures, sell certain real estate, or pay off a mortgage without a proper POA in place.
Act now and avoid the chaos of the unexpected.
Our helpful and capable staff invites you to contact us today to schedule an informative, 30 minute FREE, initial consultation with an estate planning attorney.