At some point in life, you may need someone else, like a relative or attorney, to make decisions on your behalf. This can happen when you become incapacitated or for any other reason. You’ll need a power of attorney to ensure the person you choose makes legally binding decisions on your behalf. Keep reading to learn more about powers of attorney and how to create a legally binding one.
What is a Power of Attorney?
A power of attorney is a legal document allowing someone (the principal) to give another person (agent) the legal power to make significant decisions on their behalf. The agent can be a close family member, trusted friend, attorney, or accountant. The agent must be an adult. Please note that the person you choose as your agent to make health care or financial decisions on your behalf should have your interests at heart. In other words, you should trust them and make decisions based on your interests.
They could face civil lawsuits if the agent doesn’t act in good faith and breaches the fiduciary duty. You wouldn’t want you or your family to engage in cases with the agent. So you are responsible for choosing an agent you trust and believe will make the best decisions on your behalf.
Different Types of Powers of Attorney?
There are different types of powers of attorney depending on the situation. Here are some common types you will likely need at some point:
General Power of Attorney – A general power of attorney form allows the agent to take any legal action on behalf of the principal. For instance, the agent may close or open bank accounts, buy or sell stocks, or transfer money from one account to another for the principal.
Financial Power of Attorney – This is a more specific type of power of attorney form that allows the agent to make financial decisions on behalf of the principal. The agent may be able to manage bank accounts & real property, make real estate transactions and handle tax matters.
Health Care Power of Attorney – If you want another person to make your health care decisions in case you can’t communicate or become incapacitated, you will need this power of attorney, which is often combined with a living will.
When Does an Agent Have the Power to Act?
The agent will have the power to act depending on when you want their authority to take effect. For example, a durable power of attorney is effective upon signing unless the principal provides a date. For a springing power of attorney, the date of effect is upon the occurrence of a situation or specific event, like being incapacitated. However, you can revoke a power of attorney in writing and give copies to the agent and any organization/business involved.
When is Power of Attorney Forms Legally Binding?
A power of attorney form becomes legal when properly completed and signed by witnesses. Alternatively, it can be signed before a notary public to become legal. But note that legal requirements of powers of attorney vary by state.
If you want to create a power of attorney forms.legal can help, as we provide the forms for different states. You just need to fill in the form, download, print, and sign it before a notary public.