You have a lot on your mind, but you should not be worrying about your financial affairs. If you are looking for ways to set up a power of attorney, this article will provide helpful tips and answers to common questions about getting the process started.
What is a Power of Attorney?
A Power of Attorney (POA) is a legal document that allows you to delegate authority to another person. If you were incapacitated, for example, your POA would allow your representative to manage your finances and make decisions on your behalf. This depends of course on the type of power of attorney that you have in place.
POAs are not the same as wills; they do not determine who inherits assets if you die. Rather, they are for those who have become mentally incapable of handling their financial affairs. These people often need someone to step in and take over certain tasks until they regain their capacity or die.
How do I get someone to act as my agent?
You can choose a family member or friend to act as your agent. They must be of age which usually is at least 18 years old. Moreover they need to be mentally competent and capable of understanding the duties of an agent. If you don’t have anyone in mind, consider contacting a law attorney for recommendations. But these are just some of the legal (or practical) requirements. Let’s have a look at the list below:
Who can be my agent?
The agent must be 18 years of age or older.
The agent must be legally competent and able to manage his or her own affairs.
The agent must not be under a legal disability (such as being mentally incompetent). This means that you cannot act as your own agent if you are unable to make decisions for yourself.
The agent must not be acting under duress or undue influence. This means that nobody should be forcing or coercing them into signing something against their will by someone else. It also means they shouldn’t sign a document because they feel obligated to do so.
Agents shouldn’t act as their own attorney-in-fact for another person who has granted them power of attorney.
My agent lives in a different state. Is that ok?
If your agent lives in another state, the law of that state governs whether or not you can make that person your agent. Even if that’s ok, consider the practical challenges here. Maybe your agent’s state has a different rule than yours about out-of-state agents. Then their power of attorney may be invalid when dealing with banks and other businesses in your state.
For example, let’s say the person signing on behalf of you is from Alabama. They want to open an account in California using their Alabama Power of Attorney document. That is the only proof of authority over your finances that they have. In that case they may have difficulty doing so because this form may not be recognized by California banks and financial institutions. Make sure you know what applies in your case before you make a choice!
Can I revoke a power of attorney?
Yes! You have the right to revoke your power of attorney at any time.
To do so, follow these steps:
- Tell your agent to stop acting on your behalf and destroy all documents related to the power of attorney agreement or trust.
- Destroy the original document that gave your agent power over your affairs.
- Appoint someone else as your new attorney-in-fact.
Can I have more than one agent on my power of attorney document?
Yes, you can have multiple agents on your power of attorney document. You may want to appoint one agent for each type of transaction or all transactions.
For example, you might want to name one person as your financial agent and another person for health care decisions. Or, you could name one person to act on all types of decisions (for example, in case the agent becomes unavailable).
When are successor agents useful?
In most cases, it is not necessary to appoint more than one agent; however there are some exceptions where more than is useful:
If the grantor (you) has no spouse or adult children: Let’s say you don’t have any surviving spouse or adult children who are willing-and-able adults (18 years old). Then you may consider appointing multiple people outside the immediate family circle as alternate successor agents.
If there’s no one available: Maybe none of those people are willing and able because they’re incapacitated themselves due illness or injury. Then you need to choose someone else who would be able to step into their shoes.
Conflict of interest
An agent who is signing an instrument on your behalf cannot simultaneously be acting as a creditor or debtor of yours. Additionally they often cannot be the sole beneficiary of your estate at the time that you become incapacitated.
Tips on Power of Attorney
We answered above most of the common questions about power of attorney documents. We want to close this article by sharing three of our tips on it too:
You can have multiple agents
While some people choose to limit themselves to one or two agents, you don’t necessarily have to do this. You might want to assign more than one agent in order to ensure your affairs are in order. Or maybe you need help with a variety of tasks. There’s no correct amount of agents for everyone; it’s up to you and your situation. If you have co-Agents make sure they can work well together!
Set up updates
You may also want to set up an email or text reminder so that you can check on your agent’s progress. It’s important that there is for there to be proof in writing that your agent needs to provide updates. If not to you, the updates should be to your family or a third party of your choice. Your power of attorney will not become invalid if it is not updated regularly. However, it is still important that you keep yours up-to-date because it will help avoid any problems later on down the line.
Trusting your agent is essential
Trust is the most important aspect in creating a power of attorney. This includes trusting the person to act in your best interests and follow your wishes. It also refers to acting according to the law and their abilities to handle practical matters. You want someone you can rely on when things get tough or stressful. Therefore, it’s essential that you select an agent who will act with care, loyalty and compassion throughout any situation. The main concern when appointing an agent is selecting someone who will take on this responsibility well. However, there are many other factors to consider before making a decision about who should fill this role for you.
There are many different types of powers of attorney. You can use them to manage all or some of your financial affairs, health care decisions and property. It is important that you choose an agent who will act with integrity, honesty and loyalty when they are authorized by you to make decisions on your behalf.
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