In this week’s blog post in our ongoing series on basic estate planning questions, we are going to look at powers of attorney, what they do, and how they work. Powers of attorney are some of the most important tools your estate plan will rely upon to make sure that your wishes are protected. Regardless of the kind of estate plan you create, the goals you are pursuing, or your individual circumstances, your plan will likely include one or more powers of attorney. Because of this, it’s vital you understand what these tools do, and why they matter..
What is a power of attorney?
The first thing you need to learn is that a power of attorney is a special kind of legal document, and nothing more. Through this document you, the principal, have the ability to choose someone else, the agent, as your legal representative. After creating the power of attorney your chosen agent will receive the legal authority to make decisions on your behalf. Those decisions will have as much binding legal effect as any decision you might make on your own.
Do I have to be an attorney to use or make a power of attorney?
No. This is one of the most common misperceptions about powers of attorney. You can make and use the power of attorney as long as you are a mentally capable adult. The person you selected your agent does not have to be a lawyer, nor does that person have the right to practice law once you select him or her as your representative.
The only time a lawyer comes into the picture when dealing with a power of attorney is when you create them. Because powers of attorney are legal documents, you should always have a lawyer draft them on your behalf.
What kinds of powers of attorney are there?
As the principal, you have the right to decide the kind of power of attorney you want to grant. There are many different types of powers available to you. You can, for example, grant a power of attorney that gives your agent the authority to only manage your finances while you are incapacitated. On the other hand, you could also granted a power of attorney that gives your agent the ability to make medical choices for you if you are unable to communicate or express your desire.
Essentially, as a principal, you have total control over the kinds of decision-making authority you want to provide your agent through any power of attorney you make. If you want to create multiple powers to name multiple agents, you can. On the other hand, if you want to grant a single person as much authority as possible, you can also do that.
It’s also important to note that you can change, revoke, or terminate your agent’s authority under the power of attorney you grant as long as you remain mentally capable.