Preparing for the future sometimes requires facing harsh realities.
An important component of estate planning involves naming someone you trust as a power of attorney.
What is a power of attorney?
The POA document allows you, the principal, to authorize another to handle major decisions for you in the event that you no longer can or are simply not available to do so.
What are the types of POA?
There are four different types of POA with varying powers:
- A general POA has the same level of authority as the principal. They manage the finances, sign important documents and represent the principal’s interests.
- A limited POA typically only has the power to act for a specific purpose and amount of time.
- A springing POA acts when the principal is incapable of representing themselves.
- A durable POA may have limited or general authority in the event of the principal’s incapacitation.
The type of POA you need depends on your reason for assigning one.
What are the requirements?
Creating a POA document requires three elements for legal validity:
- A dated signature from the principal
- Dated signatures from two witnesses
- Official notarization
If cases where the principal is not able to write, they can have someone else sign for them or make a small mark on the signature line. In either case, two individuals above the age of 18 must witness the signing, and neither can be the notary or the person signing on behalf of the principal.
Acting as a power of attorney is a big responsibility. Everyone involved should understand the process thoroughly before signing any documentation.
