Powers of attorney
Powers of attorney come in different forms, each suitable for a specific purpose. They serve as useful tools in estate planning.
Power of attorney documents can play an important role in your estate planning. There are four types of power of attorney, and you should carefully review each of them to determine which will work best for you if you need an agent to act on your behalf.
You can authorize four main types of powers of attorney. Why you need a power of attorney depends on the power of attorney.
Limited power of attorney
When you need someone to act on your behalf for a limited purpose, you need to use limited authority. The document itself usually indicates the date / time that the power supply will no longer be effective.
Here are a few examples from practice:
- An author can give his book agent limited power of attorney to cash checks payable to the author. That way, the agent can take their commissions off of the author’s check and then write a new check to the author for the remainder.
- If you plan to leave town on the day the deed needs to be signed for your new home, then you can give a trusted person a limited power of attorney for just that purpose.
General Power of Attorney
This is a full, full power of attorney. With this document, you assign every authority and right that you as an individual have to a specific party. Although often used in cases where the principal (that is you) is incapacitated, a general power of attorney also plays a role for those who do not have the time, skill, knowledge, or inclination to handle all of their financial affairs . The power you assign will last as long as you do, or at least until you are incapacitated – unless you choose to revoke it before that point.
Many busy people give an agent general authority to do things like:
- Cashing checks
- Collect debts
- Applying for benefits (social security, Medicare, Medicaid)
- Manage your financial affairs
- Manage your business
- Buy or sell things for you
- Filing lawsuits on your behalf
- Make financial investments on your behalf
Permanent power of attorney
The main differentiator for a permanent power of attorney is that it lasts even after an incapacity for work. In other words, you want to approve a permanent power of attorney if:
- You want to authorize the named agent ONLY if you are unable to act yourself. or
- You want to give the named agent permission immediately, which will continue after you are unable to act for yourself
For example, if you have been diagnosed with early-stage Alzheimer’s disease, you may want to appoint a permanent power of attorney to begin acting on your behalf or continue acting on your behalf if the disease results in your inability to act on your own.
On the other hand, if you become incapacitated, any limited or general authority will dissolve and a court must appoint a guardian or restorer to handle your affairs. You can withdraw from a permanent power of attorney at any time before you become unable to work.
Jumping power of attorney
This document serves the same purpose as a permanent power of attorney, but will not take effect until you become incapacitated. In drafting this power of attorney, it is important that you make your definition of “disabled” crystal clear.
Things a lawyer can and cannot actually do
You must state in your power of attorney what powers and duties you assign to the actual attorney. Regardless of the type of power of attorney you implement, the actual attorney has the authority to do only what is stated in your document. Because of this, you need to take extra care that the powers and responsibilities you have assigned are clear and specific.
Below are some things that a lawyer should actually not do, regardless of what you may have written on your power of attorney.
An actual lawyer must not:
- Indicate that the client (you) is aware of facts, such as witnesses to an accident.
- In a public election, vote on behalf of the client
- Make, amend, or revoke a will
- Provide contracted services to the client, such as writing a book
- Take on the responsibility of the guardianship or restorer who may have previously been assigned to the client
Code of Conduct for Lawyers
An actual attorney is required to exercise a standard of care when fulfilling his or her responsibilities. The law actually regards attorneys as trustees; Therefore, any breach of trust can result in the lawyer being effectively punished under both civil and criminal law.
Final remark on the assignment of a power of attorney
You can appoint any competent person over the age of 18 to be your actual attorney. You can also appoint financial institutions. However, be aware that this is a huge responsibility to hand over to a person. It is important that you choose thoughtfully and wisely.
This person is literally speaking for you and you want to be sure that they are what you want. Those who are planning to get married or who are already married may consider appointing their spouse. Most of all, you need to trust this person.
LegalShield can help you with powers of attorney
LegalShield offers personal legal membership plans that give you access to legal expertise when you need it. Your LegalShield attorney can advise you on the exercise of powers of attorney – from writing the language that sets out powers and responsibilities, defining what you mean by “incapacitated”, to helping you make a choice of an actual lawyer. They know exactly why the power of attorney is so important and can advise you.
LegalShield offers LegalShield members access to legal services offered by a network of law firms through membership-based participation. Neither LegalShield nor its officers, employees or sales representatives directly or indirectly provide any legal services, representation or advice. For full terms, coverage, amounts, and terms, please refer to a plan contract for a specific state of residence.
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