A power of attorney is a document in which you, the principal, name another person, an agent or attorney-in-fact to act in matters on your behalf. Many military personnel create POAs before deploying overseas in case something happens that needs immediate attention or in case they become incapacitated. Incapacity is probably the most common reason people need POAs. A limited POA lets someone act in a specific situation. For example, you want your son to help you sell your home or help you move into a care facility. Upon completion of the task, the POA ends.
You might want to grant a financial power of attorney to one child to help you manage your stock and investment accounts. You could also divvy up responsibilities among your children with specific POAs. One person could manage day-to-day bills while another has access to long-term accounts.
If you are concerned about physical or mental issues leaving you incapacitated, a health care power of attorney allows another person to make decisions on your behalf when you are unable to do so. If you are admitted to the hospital or in a car accident, your POA would be able to handle medical decisions. Without a POA, the court may have to designate a guardian to handle your affairs in your incapacitated state.
Keep up with documentation
With a POA, an agent has a lot of power. The agent must be someone you trust implicitly. You should make sure that your POA has access to the information he or she needs to manage your affairs. You might also want to review the POA with your lawyer on an annual basis to make sure you have protected your assets. When you sign a POA, you do not lose control over your affairs. The POA simply comes into play when needed. It is a good idea to talk to a lawyer about the wording of a POA before signing over that power to anyone.
