What is a power of attorney, and why do I need one?
A power of attorney is a legal document you sign that gives another person the ability to act for you. The principal on a power of attorney is you, the individual creating the document. The agent is the person you assign to make decisions and act on your behalf.
There are two main types of power of attorney documents.
- Financial. A general or financial power of attorney gives an agent the ability to represent the principal in financial matters, including with the IRS. This form also gives the agent the ability to pay bills and handle business as well as real estate transactions for the principal.
- Health care. A second form is a health care power of attorney. This document appoints an agent to make health-related decisions for the principal if he or she cannot do so on their own.
Why You May Benefit From a Power of Attorney
Whether you plan to travel extensively out of the country or your health is high-risk, having a power of attorney document in place helps ensure someone can make decisions for you. Most importantly, you select a person you trust to act the way you want them to. This legal document is one component of your estate plan, alongside your will and trusts.
One of the obligations the agent has is to act in the way the principal desires. If he or she does not know what the principal desires, then the agent must act in the principal’s best interests. For this reason, principals should ensure the document clearly outlines their wishes, including spelling out any legal rights and expectations the agent will have for the principal.
When a Power of Attorney Goes into Effect
Once a power of attorney is signed, it goes into effect immediately. It remains in place until the principal dies, the principal changes the document by revoking it, the agent can no longer carry out the requirements, or the courts invalidate the document for some reason.
Let Us Be Your Trusted Wilmington Estate Planning & Probate Attorney
When you work with our dedicated estate planning team at Legacy Lawyers, you’ll have the ability to outline your wishes and create estate planning documents that clearly express them. Contact us today to learn how to create power of attorney documents that protect your goals and help you plan for whatever the future may hold.
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