A power of attorney, or POA, can be an extremely helpful legal document, which is one reason why it is so widely used. The ability to give another individual the authority to conduct business on your behalf comes in handy in many situations. A POA is an especially popular legal document for seniors; however, it is also often used to deceive and defraud those same people. If you have been asked to sign a POA by someone, the best thing you can do is to have your estate planning attorney review the document first. Consider the following information:
- State laws differ with regard to how a POA must be created, signed and even registered. The form you are being asked to sign might not even be legally binding.
- A traditional POA terminates upon your incapacity. If your desire is to give someone the authority to act on your behalf in the event you are unable to do so, a traditional POA will not accomplish that goal.
- A durable POA does survive your incapacity; however, there are very specific rules required to create a valid durable POA in most states. The right language must be used, incapacity must be defined and the document must be registered in many states.
- A POA is not the same thing as a living will, advanced directive or healthcare POA. If your goal is to give someone the right to make healthcare decisions for you if you are unable to make them, a POA is usually not the correct document to use.
- A POA that gives someone broad authority can effectively give them control over all of your finances and assets. This is not something you want to do without thinking it through and consulting with your attorney.