What Is A Power of Attorney?
A power of attorney is a legal document that allows you to appoint another person as your agent to make decisions about your property for you.
There Is More Than One Kind of Power of Attorney
A Power of Attorney may be general, meaning that it gives your agent power over most of your business affairs, or it can be for a particular purpose, meaning that it covers only a certain transaction or type of property. For example, you could give someone a limited power of attorney to deal only with a certain one of your financial accounts, to file your taxes for a particular year, or to collect one specific piece of property on your behalf.
You may also wish to have a healthcare power of attorney, which gives your agent authority to make certain arrangements for your medical care (although you should know that a healthcare power of attorney does not necessarily include a “living will,” or advance directive provision).
An Agent Named In Your Power of Attorney Is Not Necessarily The Same As The Executor of Your Will
It’s important to note that a power of attorney is effective while you are alive, but a will is only effective once you die.
Some people mistakenly believe that if they have signed a power of attorney then they do not need a will. This is incorrect because a power of attorney has no effect after your death. The person named as your agent in your power of attorney does NOT automatically take control of your estate after you die.
By that same token, you should understand that naming an executor in your will does not give that person any powers over your property while you are still alive. If you want someone to have authority to act on your behalf while you are living then you need to talk to your estate planning attorney about creating a Power of Attorney or a trust.
You Must Be Competent to Sign A Power of Attorney
Some people mistakenly believe that anyone can sign a power of attorney. However, you must be competent when you sign the document in order for it to be valid.
So, if your parent has already been declared incompetent then it’s too late to have him or her give you their power of attorney. You will have to talk to your attorney about other ways to help with their affairs.
That’s why it’s important to think about signing a power of attorney before you think you need it.
Why You Should Have A Power of Attorney
There are several reasons you might want a power of attorney, but in general the reasons fall into two categories: convenience and “incapacity.”
Convenience. Even if you are young and healthy, you may need a power of attorney if you travel often or if you are in the military and may deploy overseas. A power of attorney can give someone you trust the ability to manage your affairs while you are away or unavailable. Sometimes spouses will give each other powers of attorney so that they do not always have to both be present to conduct business.
Incapacity. A “durable” power of attorney continues to be effective even after you become “incapacitated” or incompetent. So, if you sign a power of attorney now, while you are competent, and later develop dementia or some serious illness, your agent can handle your business and money for you without first having to get permission from the court.
If You Do Not Have a Durable Power of Attorney
If you do not have a “durable” power of attorney and you become incapacitated or incompetent, then it may be difficult for someone to take care of your business for you. In some cases, your loved ones may need to file a petition with the probate court to get the power to help you with your finances.
An Estate Planning Lawyer Can Help
Online do-it-yourself forms can be tempting, but remember that estate planning isn’t one-size-fits-all, and that online forms may not be accurate or have adequate instructions to help you fill them out correctly.
A lawyer can help you make sure that your power of attorney works for you and coordinates with your overall estate plan. Get peace of mind by talking to our experienced estate planning attorneys today. Call us at 205-553-5353 or come by our Tuscaloosa office to find out what we can do to protect your assets and your family.