By Nora Heston Tarte
There are a lot of misconceptions associated with a Power of Attorney. Trying to understand the who, what, when, where and why of the legal document that allows another person to act in your place when you are unable is a complicated feat. Allow us to arm you with all you need to know to decode the POA alphabet soup, and get you started on the track to obtaining this important tool.
What is a POA?
A POA—which stands for Power of Attorney—is a legal document individuals file to give another person the ability to handle their finances and make life decisions in the case that they cannot. This is often associated with individuals undergoing medical treatment or who have a potentially life-threatening illness. However, unexpected occurrences can arise at any time, which is why everyone—regardless of age—should have a POA filed. A person who takes on these duties is often referred to as a POA, as well.
This way, in the event that a person becomes unconscious, disabled or otherwise unable to make sound life decisions, including those that relate to their finances, another person will have the power to act on their behalf.
Who should be your POA?
Appointing a POA is an important decision, and it should not be taken lightly. Sit down and have a conversation with anyone you are considering making your POA. This way, you can address any concerns they have regarding the position as well as discuss your life preferences in the case that your POA will be called to act in your place.
Foremost, a POA should be someone that you trust. This person should be made aware of your financial and legal affairs, as well as have access to all information they may need to carry out your wishes should the need arise. Consider this role like a job. Whoever you select should be organized, have an eye for detail, a commitment to you or the position at hand, a clear idea of the expectations they assume in this role and an understanding of finances and even business so they may connect with accountants, attorneys and other parties if necessary.
Many POAs are children or spouses. However, consider the breadth of your business and financial circumstances before choosing your next of kin. If these reach beyond the knowledge of those closest to you, consider choosing a POA that better understands your financial and business goals and will act in your best interest on these matters.
When should you choose a POA?
Don’t wait. All adults should have a POA in place. Once a POA is filed, it will remain in tact until you revoke it, or until you die.
One common misconception is that if you are married, your spouse will already have POA privilege. This is not the case. Even a husband or wife can run into complications while trying to navigate the red tape that surrounds your finances.
Why have a POA?
A POA is put in place to protect you as well as to relieve some of the stress your family may face were the worst to happen. If a POA is not filed, families are forced to undergo a guardianship proceeding to decide who should be given the duties typically held by a POA. This can be both a timely and costly process. If your POA has already been appointed, it can be avoided.
Where can you obtain more information about a POA?
A local attorney can provide information about a POA document, including how to file one and what powers the person will be granted.