A Durable Power of Attorney (POA) is a very powerful document that authorizes an agent to manage an individuals financial affairs if they become unable to do so themselves. A power of attorney can only be created by an individual with a sound mind. Loved ones seeking to manage an individual’s affairs that no longer has a sound mind need to petition for adult guardianship. There are two types of power of attorney, general and limited.
Advantages of Power of Attorney over Guardianship
In a perfect world everyone will use a power of attorney or a trust to manage their affairs. A POA costs a lot less money and time than a petition for guardianship. Guardianship also requires court supervision.
General Power Of Attorney
A general POA allows an agent to manage all assets owned by his principal (“Principal” is the individual who granted the power”). This gives the agent power over:
- Banking Transactions
- Purchases, sales, conveyances, transfers, or leases
- Investments
- Taking out mortgages or loans
- Manage Insurance
- Legal Action
- Safety Deposit Boxes
- Forgive or seek debts
Limited Financial Power of Attorney
A limited POA can be used to grant an agent only some of the powers listed above.
Immediate vs. Springing Power of Attorney
A POA can be either “springing” or immediate. An immediate power of attorney authorizes an agent to act on the principal’s behalf as soon as it is signed. A springing power of attorney only comes into effect after a certain occurrence or date. An obvious example of a springing power of attorney is the power of attorney only becomes effective when the principal becomes incompetent.
Responsibilities of Agent
Agents granted financial poa must act in the best interest of their principal. It is criminal to abuse this power. Agents must also keep a record of all receipts, transactions, and disbursements.
The Pendergraft Firm LLC Power of Attorney Drafting Services
Brian Pendergraft is an elder law attorney that has drafted many elder care documents in accordance with his clients wishes. Call (301)-205-9013 or e-mail [email protected] to schedule a free phone consultation.
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