A simple POA will identify the following basic elements:
- Agent(s): a responsible and trustworthy person acting on your behalf.
- Principal: person assisted with personal, business, or legal matters.
- Grant of Authority: general or specific authority to take certain actions.
- Effective Date: when the the form effectively begins, usually immediately.
- Signatures: the Principal and a Notary must sign the document.
In addition, if you ever become incapacitated, without this document, even if you have a spouse, the court may need to step in and appoint a guardian or conservator for you. The process of appointing a guardian is costly and requires the guardian to formally report your situation to the court each year. CNN Money estimates that the process of obtaining a court appointed guardian exceeds $1,000. If this is the situation you find yourself in now, please read our guide about getting guardianship over your elderly parent here.
The powers that you can grant your attorney-in-fact include:
- Real Estate: To buy, sell, rent, or otherwise manage residential, commercial, and personal real estate.
- Business: To invest, trade, and manage any and all business transactions and decisions, as well as handle any claim or litigation matters.
- Finance: To control banking, tax, and government and retirement transactions, as well as living trust and estate decisions. Financial powers also allows your representative to control personal insurance policies and to continue donating to any charities in your stead.
- Family: To purchase gifts, employ professionals, and to buy, sell or trade any of your personal property.
- General Authority: This grants your personal attorney the authority to make any decisions that you would be able to if you were personally present.
Yes, there are four types of POA forms.
- General: A general Power of Attorney form allows your representative to manage all of your property-based and financial affairs. This type of POA grants them general authority.
-Specific/Limited: A specific Power of Attorney form limits your representative s responsibilities to certain types of decisions. You can choose to allow someone to only make decisions in relation to business, for example.
- Ordinary: An ordinary Power of Attorney is only valid while you, the principal, are capable of making decisions. This type of POA becomes invalid in the event that you become incapacitated.
- Durable: An enduring Power of Attorney is when the contract continues even if you, the principal, become incapacitated.
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