Power of Attorney
A Power of Attorney (POA) is a document authorizing someone to manage your finances on your behalf. You determine how much power the person will have over your financial affairs. You can give your attorney-in-fact the power to do the following:
- Use your assets to pay your everyday expenses and those of your family;
- Buy, sell, maintain, pay taxes on and mortgage real estate and other property;
- Manage benefits from Social Security, Medicare or other governmental programs or civil or military service;
- Invest your money in stocks, bonds and mutual funds;
- Handle transactions with your bank and other financial institutions;
- Buy and sell insurance policies and annuities for you;
- File and pay your taxes;
- Operate your small business;
- Claim property you inherit or are otherwise entitled to;
- Hire someone to represent you in court; and
- Manage your retirement accounts.
In any POA, you are considered to be the “principal” and the person to whom you assign the power is your “agent” or “attorney-in-fact.” Your attorney-in-fact is not and does not have to be a lawyer, but it should be someone you trust a great deal.
The POA is “durable”, that means it remains valid even if you become incompetent or incapacitated. The POA form indicates this.
The POA allows the attorney-in-fact to manage your financial affairs if you are incapable of managing them yourself.
The POA may be used by your agent even when you are not incapacitated. The POA is effective as soon as it is signed and notarized. You must trust the person you name!
If you are mentally competent, you may revoke the POA at any time with a signed document. The revocation is not effective until the attorney-in-fact has received notice of the revocation. If you do not revoke it, a POA ends at your death. To name someone to manage your affairs after your death, a Will or Trust should be prepared.
The POA does not grant any powers to make health care decisions for you. To give someone those powers, a Healthcare Directive must be prepared.
If you are interested in learning more, contact me for a free initial consultation and I will be happy to answer your questions.