Proper Nook: Power of Attorney a Helpful Property Planning Software for Visitor Columns
At some point even the healthiest and most independent of us may experience a period of incapacity for work, be it due to illness, injury, or even old age. There is a very good chance that you will no longer be able to take care of your own business and financial affairs due to permanent or temporary inability or incompetence. During this time, there are still bills to be paid and certain financial matters to be managed. The best, fastest and cheapest way to protect yourself against this situation is to create a permanent power of attorney beforehand.
A power of attorney, also known as a POA, is a written authorization to act on behalf of someone else in personal, business, or other legal matters. The person who creates the POA is referred to as the “client” or “approver” because he gives authority to someone else. This client designates someone else who acts on his behalf and is referred to as an “agent”. This authorized representative fulfills the legal obligations on behalf of the client with the same authority and effect as if the act had been carried out by the client himself. In short, whatever the agent does on behalf of the principal is legally binding.
Very often powers of attorney are used in the area of earlier law, where an aging parent can no longer handle their own affairs due to a lack of mobility or a lack of mental abilities. While the senior is still empowered to authorize a child, a POA is created and executed, which authorizes the child to act on behalf of the parents.
Once properly drafted and executed, the child now has the power to manage all of the parents’ financial affairs. These activities can range from general tasks like banking, processing investments, and paying bills, to more unusual tasks like giving gifts, transferring land and assets, and filing tax returns. Basically anything the parents can do can be done by the child who is now the agent.
This power can come in handy in a potential emergency situation, ensuring bills are paid on time, property is protected, and finances are kept up without disruption. Additionally, this document and the authority it provides can be invaluable when dealing directly with banks, nursing homes, the IRS, Social Security, general creditors, and financial advisors. All of these organizations will look to the POA when the time comes to act on behalf of parents.
In most cases POAs can be created and executed quickly and easily, as long as the client is responsible and the authority is granted immediately. Should the client no longer be responsible, the authority must be given by a probate court in the form of guardianship, which is a much longer, more complicated and more expensive process. And one of the best things about a POA is that it “survives” incompetence. If done while the headmaster is still sane, it will remain effective even if his or her mental faculties deteriorate. As you can see, before it is too late and guardianship is required, creating a Power of Attorney is a far faster and cheaper alternative.
As one of the most useful and effective estate planning tools for young and old alike, a properly drafted power of attorney can be a valuable asset in your legal plan, ensuring that your business and financial affairs are well managed when you can’t handle them yourself. And the support of one An experienced estate planning attorney will ensure that your POA is valid, effective and enforceable.
Marc Page is an attorney with a general law firm in downtown Westerly. Licensed in both Rhode Island and Connecticut, he can be reached at 401-596-1726.