A Power of Attorney (POA) is a document that lets clients decide which organization or individual will manage their affairs once they are no longer able to do so on their own. It should be kept in mind that POAs are not all equal. Every type gives the attorney-in-fact or agent a certain level of control.
The General Power of Attorney provides a wide range of powers to the attorney-in-fact or agent. Such powers include handling business and financial transactions, purchasing life insurance, operating business interests, settling claims, hiring professional help, and making gifts.
The Special Power of Attorney, on the other hand, lets the client decide exactly which powers their attorney-in-fact or agent can have. It is ideal for people who can no longer deal with their affairs due to health issues or commitments. Some of the matters included in a special power of attorney document are real estate management, selling of properties, handling of business and financial transactions, and debt collection.
Some other types of POAs include The Health Care Power of Attorney, which grants the attorney-in-fact or agent the power to make medical decisions for the client in the event that the client becomes unconscious, unable to make sound decisions, or mentally incompetent; and The Durable Power of Attorney, which is basically a health care, general, or special power of attorney with a durability provision to keep the power of attorney effective. This Power of Attorney can help when you need to look into life care for your relative.
The client may also choose a durable power of attorney as a means of preparation in case they become mentally incompetent as a result of an injury or illness. The client should specify in the document that the power of attorney does not become effective until they are declared mentally incompetent by a doctor.
Setting up a power of attorney is important for the elderly. They should take care of it before they become terminally ill, forgetful, or difficulty dealing with tasks. They should not hesitate to talk about it with their children. Strokes, dementia, and other chronic illnesses can cause a person to become incompetent. This is why it is important to appoint someone who is compassionate and reliable.
Children of the elderly can also set up the power of attorney. They have to set it up for their aging parents before they show any warning signs. Only those who are in the right state of mind can assign a power of attorney.
If you have an aging parent, you should get a durable power of attorney so that you can make medical decisions on behalf of your parent. This is very important because without a power of attorney, you will not even be able to pay bills on your parents behalf. If you have brothers and sisters, you can all have a power of attorney, either jointly or individually.
If you have a joint power of attorney, your power of attorney will tell you whether decisions should be made unanimous or not. In addition, it may require you and your siblings to answer to a third party to prevent any abuse. It can also prevent you and your siblings from changing your parents will as well as their beneficiary designations for their life insurance policies.