Power of Attorney 101
October 27, 2014
Making the decision to put a power of attorney in place is an important and wise one, since powers of attorney are accepted in all states. When valid, a power of attorney can give someone else the opportunity to make decisions and elections on your behalf. Like all estate planning documents, you should have your estate planning attorney review your document to ensure it’s validity in your resident state.
A power of attorney can be sweeping and broad, enabling an agent to act fully on your behalf, or it can be limited to ensure that certain transactions and scenarios are taken care of in the event that something happens to you. If you want to be sure that the closing portion of your home sale goes through, for example, you can structure your power of attorney to only “activate” the agent’s powers in that particular capacity.
Just as your power of attorney can be flexible based on your needs, so too can the timeline for when you agent’s powers become active. Signing the document can make your power of attorney active immediately, but you might decide to include wording that only makes it active after an event that leaves you incapacitated. A sudden car accident or disability are examples of circumstances where you might want your agent to become active on your behalf.
Your agent can act on your behalf in general or in the capacities you outline in the actual document, but it’s critical that your document is valid and that a copy is maintained by the agent. This is because when they act on your behalf, they will usually need to produce the power of attorney in order to successfully complete tasks or transactions for you.
Some people even use a power of attorney simply as a matter of ease; doing so allows you to equip someone else with the ability to sell and buy assets regularly without you actually needing to show up in person. Used as a future planning tool, it can also be important to protect your interests in the event that something happens to you. To put your power of attorney together, contact us at 732-521-9455.
