Spring Has Sprung (But Hopefully Your Power Of Attorney Has Not)
You may have heard a lot about powers of attorney, but how do you know if you need one? Most everyone, from military personnel, to senior citizens, to a person going on a cruise could benefit from a power of attorney.
What is a power of attorney and what powers will my chosen representative have? A power of attorney authorizes someone else to act on your behalf. There are several different types, and the powers your representative will have depends on the type of power of attorney you signed:
- General: Authorizes an individual to act on your behalf in a variety of circumstances. The typical actions are broad and include transactions such as banking, buying and selling property, entering into contracts, and filing tax returns.
- Special: Authorizes an individual to act on your behalf in specific situations, such as handling banking transactions, or buying or selling a car or real estate.
- Health care: Authorizes an individual to make health care decisions on your behalf if you become incapacitated.
- Durable: A general power of attorney can be made durable, which means it will remain in effect even in the event that you become mentally incapacitated.
- Springing: A power of attorney that goes into effect at a specified time or event in the future such as your becoming mentally incompetent.
When will the Power of attorney become valid? With most powers of attorney, the document is valid as soon as you sign it. This means that your representative can start making decisions and exercising the delegated powers immediately. With a springing power of attorney, the document becomes effective at a date in the future. If you want to use a springing power of attorney, it’s a good idea to include specific language about how your incapacity will be determined. Some lawyers will hold the power of attorney for you until a physician informs the lawyer that you are no longer able to manage your own affairs.
That’s the lowdown on powers of attorney. It’s a good idea to get one before you actually need it.