A Power of Attorney is a legal document which allows you to appoint another person to represent you. When you create a Power of Attorney, you are the principal and the person that you are appointing to represent you is called the agent or attorney-in-fact.
A Power of Attorney is used for a variety of reasons. You can use one to authorize someone else to handle a specific task such as signing documents while you are away, or you can create a Power of Attorney so someone can handle your finances if you become incapacitated due to illness or a serious injury.
A Power of Attorney gives another person the legal authority to act on your behalf. You can give your agent broad, sweeping powers such as handling all of your personal finances, or you can limit him or her to specific actions and dates. For estate planning purposes, your agent cannot write, change, or revoke your will at any time. The basic types of Power of Attorney include:
- General Financial Power of Attorney – This permits the agent to handle any or all of the finances of the principal but not the principal's health care decisions.
- Durable Financial Power of Attorney – This type remains active if the principal becomes incapacitated.
- Durable Power of Attorney for Health Care – Also called the Health Care Power of Attorney, which the state of California combines with a living will to create an advanced health care directive.
Everyone, despite their age should include a power of attorney in their estate planning documents. The reason for this is because no one can entirely predict or prevent accidents and illness. At any age someone can be injured in a serious car accident or suffer from a traumatic brain injury or be stricken with cancer. Should the inevitable happen, it's good to have already selected someone that you trust to take care of your financial and/or health care decisions on your behalf.
Your agent can essentially do anything that your Power of Attorney permits and you can limit the types of financial decisions that you want your agent to make. Your agent cannot write or change your will and even once it's in effect, you can still make all of the financial decisions that you made before you had a Power of Attorney. You can make a Power of Attorney go into effect immediately, or you can choose to have it go into effect only if you lose the ability to make financial decisions.
If you wish to create a Power of Attorney, make sure you choose someone that you trust completely. Next, contact a San Jose estate planning lawyer for advice. It's vital that you understand what you are doing before you sign anything. As the founder of the Law Offices of Timothy D. Henry, I am here to answer all of your questions and help you establish a Power of Attorney that is suited to fit your needs.