Understanding Power of Attorney

Nominating a Power of Attorney is one of the most important decisions a person makes when crafting their estate plan. Understanding the legal meaning behind such a term is a crucial part of making that decision. I explain in a post from January 2016:  

What is a Power of Attorney (POA)?

A legal document in which the “Principal” appoints an “Agent” with the authority to act on his or her behalf in financial matters. An Agent’s authority under a POA may begin immediately or upon the happening of a particular event or a particular date. A springing Durable Power of Attorney becomes effective upon the incapacitation of the Grantor.

How does a POA plan for incapacity?

A POA plans for incapacity if it is “Durable,” because it allows the Agent to act on behalf of the Principal if the Principal becomes incapacitated. Someone is incapacitated when a treating physician, under penalty of perjury, states such in a signed writing. Without a POA, it may be necessary for family to petition the probate court for conservatorship over an incapacitated individual in order to legally act on his behalf in financial matters.

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