A power of attorney form is a highly recommended legal document which can serve a variety of purposes. In a nutshell, it is a legal document that gives one person the power to act as the authorized representative of another, even making decisions on their behalf. The person granting power of attorney is referred to as the “principal,” while the person being designated as the principal’s representative is referred to as his or her “agent.” Depending on it specific terms, a power of attorney may expire at some point in the future. Also, it can be revoked while the principal remains competent. There are two basics types of forms used for designating power of attorney: general and limited.
Standard Contents of the Form
The contents of such a form will vary from state to state as well as according to the scope of the power of attorney being designated. In fact, that latter factor usually makes up a large portion of the content of the form. Language specifying the extent to which representation is authorized, and for what purpose, and for how long, is all necessary in order to make sure such power is recognized and not exceeded. Of course, the signature of the principal and the agent are both also required. These parts are all universal. Additional requirements mandated by the state you live in will also be included.
Uses Of the Form
There are several ways to use a power of attorney form. Medical concerns are a quite common (and necessary) use. No one likes to think about this, but what happens if you are rendered unable to handle your own affairs, even temporarily? Insurance paperwork generally needs to be dealt with during such a time, as well as other types of transactions. Unless someone has been legally designated as your representative, many of these transactions can only be performed with your express authorization. With the appropriate legal designation in place, you won’t have to worry about any of that. You’ll be free to focus entirely on your recovery.
Variations On the Power of Attorney
As mentioned before, one type of power of attorney is called a general power of attorney. It renders the agent wide power over the principal’s financial affairs and must be signed by the principal while he or she is in full capacity and well aware of the consequence of such a decision. A limited (or special) power of attorney is, as its name implies, far more restrictive. It only affords the agent power to act on the principal’s behalf in specified manners, such as the sale of a home. These matters are specified on the form itself. A third variation is called a “springing” power of attorney. This one takes effect after (if) a specified event happens, or on a specified date.
Other Types
Though they aren’t used as frequently, there are indeed several other incarnations of the power of attorney form. One of these is the power of attorney for the care and custody of children. This one can give you a lot of peace of mind and save you and your loved ones a lot of money in the long run. Without such a form, should a custodial dispute arise in the face of your incapacity, guardianship proceedings will begin in the court. These can be both time consuming and expensive. Since you’ll have the manner taken care of in advance, you’ll be eliminating a lot of expense and headache for a lot of people.
Health Care Power of Attorney
As we’ve already alluded to, the health care power of attorney form is one of the most common types. It is also known as a medical power of attorney or an advance health care directive. It actually serves two important purposes. First of all, it serves the purpose we’ve already discussed. That is, it allows you to designate someone to make decisions regarding your health care that aren’t already specified in the document itself in the event you become mentally and/or physically incapable of doing so. Secondly, it allows you specify your preferences regarding certain decisions ahead of time. We recommend that literally everyone make use of this particular type of power of attorney.
In the event that you were ever to become permanently unconscious, one of the decisions you’ll be able to specify in your health care power of attorney is whether or not you prefer the use of life support systems. Given the significance of such a decision, it’s best to be able to make it while you’re in optimum health, both physically and mentally. That’s why we again want to stress the fact that you don’t need to be engaged in dangerous activity, elderly, or in poor health in order to craft this document. We strongly suggest you avail yourself of the opportunity to do so long before any of these.
Financial Power of Attorney
The second most common type of power of attorney form is the financial power of attorney. In this case, the agent still has the obligation to conduct business in the best interest of the principal. The agent is not authorized to override the wishes of the principal, only to act in his or her stead. A financial power of attorney does not authorize the agent to make health care decisions on behalf of the principal. It only works, as its name implies, in regards to financial matters. Therefore, you shouldn’t make the mistake of assuming that just because you have a financial power of attorney in place you’re covered in terms of health care decisions.
- Power of Attorney Form for Child Care
In Summary
Sometimes people don’t even think about a power of attorney form until its too late. Don’t make that mistake! Have all the necessary legal authorizations in place, and you’ll be making life easier for your loved ones in the midst of an already difficult situation. Not only that, but you’ll have the piece of mind that comes with knowing that the people making decisions on your behalf will be people you trust.
The Importance of Defining the Extent of Power of Attorney
As we’ve discussed on our site, a power of attorney form, in basic terms, establishes the authority of one person (the principal) as bestowed upon another person (the agent), giving the agent the legal right to act on behalf of the principal in a variety of situations as determined by the legally binding document. There are different types of power of attorney agreements, each designed to address a specific set of circumstances from health and medical issues, to real estate and financial transactions to the broader scope of general and durable power of attorney designations which can encompass up to 100% authority in the principal’s personal, business and legal affairs.
No matter what your purpose in filing a power of attorney form, it is important that the extent of the power given is clearly and unmistakably defined. For authorization in medical decisions on behalf of the principal, there is a separate medical power of attorney form just for that purpose. However, for various other matters for which you might choose to designate an agent with power of attorney, you’ll want to outline the scope of that power specifically. If you are placing a limit on the scope of authorization upon your designated agent, there is a separate form for establishing limited power of attorney. Here you will dictate over what areas of your affairs your agent has power to act on your behalf.
With a general power of attorney, typically the scope of authority is very broad, though certain restrictions can be placed individually. When using a power of attorney as a part of life and estate planning, however, it is important to note the main differences between this general power of attorney and what’s known as a durable power of attorney. Both designations grant a wide spectrum of legal authority to the agent. The durable power of attorney, however, does not expire with time nor task completion. A durable power of attorney is in place for the duration of the life of the principal, unless said power is expressly withdrawn by the principal.
This key difference could prove to be important in the event that you are critically injured, stricken ill very suddenly or otherwise rendered incapable of tending to your affairs personally or designating an agent to act on your behalf. By having this arranged in advance, you don’t have to be concerned with your personal affairs, as your designated agent is already authorized to handle them via the power of attorney form.
Knowing the Five Power of Attorney Form Options
Making the best decision is a result of being as well informed as you can be regarding any given topic. When it comes to decisions regarding the selection of the right power of attorney form, knowing the five basic types of authority designations can provide valuable insights into which option might be best for your particular situation.
First, it’s important to really understand the purpose of a power of attorney form. Power of attorney is the legal authorization of one individual to make important decisions and to speak on behalf of another individual. The person being granted this authority is commonly known as the agent or the attorney-in-fact. The person granting this authority is known as the principal.
Power of attorney may be established for a number of reasons, including estate planning, real estate management, financial purposes, guardianship and health-related issues. The reasons for establishing a power of attorney agreement are often very personal, and the appropriate power of attorney form is usually dictated by individual circumstances as they relate to the need for a power of attorney arrangement.
Durable power of attorney is an indefinite contract, meaning that is remains in effect until either the authority is willfully revoked by the principal, or the principal passes away. Durable power of attorney grants the broadest spectrum of authorization to the agent on behalf of affairs both personal and business related of the principal.
General power of attorney is a non-durable type of legal agreement between the agent and the principal. Non-durable simply means that this general power of attorney can include an expiration based on either timelines or events. This type of agreement, like the durable power of attorney, is often very broad in scope, though it can have conditions written into it to limit agent authority as the principal sees fit.
Springing power of attorney is a contingency plan which “springs” into effect in the unfortunate event that the principal is rendered incapable of tending to his/her own personal affairs. The agent named in a springing power of attorney must attain court authorization to activate the agreement at such time as it becomes necessary.
Limited power of attorney can be used with a limited scope of agent authorization, as its name would imply. This type of agreement is often used to affect real estate transactions on behalf of the principal, as well as for short term power of attorney arrangements.
A medical or healthcare power of attorney form is used to authorize a specific person to make medically necessary decisions on behalf of the principal if he/she is deemed unable to do so independently.
Understanding the basic purposes behind these five primary power of attorney form options will help you make the most beneficial choice for your particular situation.
