A power of attorney is one of the most important estate planning documents which is why it is important that you include it in your estate plan. A power of attorney will come in handy when you are incapacitated or unable to make important legal or financial decisions.
This legal document allows you to select an individual who will make important legal or financial decisions on your behalf. Without a POA, the court will have to step in and select an individual who will be charged with making those important legal or financial decisions on your behalf. I bet you wouldn’t like such a situation, so it is best you contact an attorney and sign a power of attorney before it is too late.
After creating a Power of Attorney, what next?
After creating a power of attorney, you may be keen to know when it’ll take effect. In this article, I have provided the answer to that question. However, before we reveal the answer to you, let us consider what a power of attorney is.
What is a Power of Attorney?
A power of attorney is a legal document that allows an individual (the principal) to designate another individual (agent or attorney-in-fact) who will be charged with making important legal and financial decisions on his or her behalf.
A POA is in effect provided the principal is alive and it can only be effected by a principal who mentally alright. There is the misconception that once you appoint an attorney-in-fact you tend to lose control over how your assets are used. This is false as a POA only steps in when you are unable to handle your affairs.
Main duties of a Power of Attorney
- The main duties of a POA are as follows:
- He or she helps in making decisions on behalf of an individual who is mentally incapacitated
- He or she helps in handling legal and financial issues on behalf of the principal
- He or she is charged with making important medical decisions on behalf of the principal
Who Needs a Power of Attorney?
Any individual who wants to allow another person to carry out some legal acts on his or her behalf needs a power of attorney or POA. A POA document can allow another individual to handle your financial and legal matters, make health care choices, or cater to your children. Several states have an official POA document that are easy to adopt.
Types of Power of Attorney
There are about for types of power of attorney, and they are:
- General power of attorney
- Durable power of attorney
- Special or limited power of attorney
- Springing power of attorney
Contact an attorney to determine which of the POA is suitable for you and your circumstances.
When does a Power of Attorney Take effect?
The POA becomes effective immediately you sign it before two witnesses and have it notarized. You may present the POA to your agent and instruct the individual not to use unless you are unconscious or mentally incapacitated. However, the agent could use the POA immediately it gets to him or her.
Some individual may decide to use a springing power of attorney which doesn’t take effect until some event occur, like your incapacity. There are many issues with this type of power of attorney. First off, the agent or attorney-in-fact needs an affidavit displaying the triggering event has happened before he or she can use the Power of Attorney.
Afterwards, even though the law states that banks and other institutions that accept the document with the affidavit aren’t liable, banks have been unwilling to recognize the attorney-in-fact’s authority under a springing power of attorney. Ultimately, one isn’t sure if such a document will be accepted in other states.
Do you want to create a Power of Attorney? Or do you need advice on matters regarding a power of attorney? Don’t hesitate to contact our office. Our estate planning attorneys are experienced in matters regarding the different types of POA.
