A Power of Attorney is a document that lets you appoint someone to either handle a specific task or act with general powers to handle your finances if you become incapacitated. Here are the answers to some frequently asked questions about the second type of power of attorney:
1. What things can my agent do under a power of attorney? Some of the things your agent can do acting under a power of attorney are make deposits and withdrawals from your bank accounts, pay your bills, buy or sell property, enter into contracts on your behalf, file your tax returns, and re-arrange your assets. If you want to limit the kinds of tasks your agent can do, you can place such limitations in the document.
2. How do I choose an agent under a power of attorney? The primary trait your agent should have is trustworthiness. An agent has broad powers so you want to be sure the individual you choose will act with the utmost of honesty and integrity. Choose a trusted family member or friend or in some cases, perhaps a private professional fiduciary may be your choice.
3. Can my agent under a power of attorney make health care decisions for me? An agent under a power of attorney for finances cannot make medical decisions for you. To have an agent make medical decisions and consult with your doctors, you need to execute an Advance Health Care Directive which will appoint an agent to make medical decisions and carry out your wishes about medical treatment and life-sustaining procedures.
4. What is a “springing” power of attorney? A springing power of attorney is one which can be used only when you become incapacitated. Most springing powers of attorney provide that before it can be used by your agent, one or two physicians must certify that you are unable to take care of your own finances. Powers of attorney can also be drafted to be effective immediately.
5. Is my agent subject to any scrutiny in using the power of attorney? There is no official or governmental monitoring of agents under a power of attorney. A power of attorney can be abused and dishonest agents have been able to misuse a power of attorney to steal a principal’s assets. That is why it is so important to appoint an agent who is trustworthy. You may also want to require your agent to keep accurate records of their activity and provide you or another family member with periodic accountings.
If you want to create a power of attorney, it must be in writing and notarized. For assistance with such a document, contact us for a complimentary consultation.