(US Law and Generally) A Power of Attorney is a written, legal contract in which an individual, the principal, grants another individual, the agent, the authority to act on the principal’s behalf in regard to private, business or financial decisions. Reliable, statutory, and medical are the profitable assortments of the POA that are available at present.
Establishing the scope of, and boundaries to, the agent’s power is important to a successful relationship between the two parties. An agent can be anyone the principal trusts (who is typically 18 years old or older) to carry on the principal’s important matters, which may possess financial, personal tax, and real estate matters. The letter of attorney may recognize alternative agents if the named agent dies, becomes legally disabled, resigns, or refuses to act on behalf of the principal. A letter of attorney sets the standard for the amount of authority that the agent will have. It should be very detailed about what powers are being permitted and what limitations are placed on these powers. With a durable letter of attorney, the document typically states that the transfer of power is effective immediately or when the principal is unable to coherently make decisions on his/her own due to some disability or incapacity. If the durable letter of attorney is to become useful when the principal becomes incapacitated, the definition of “disability” and “incapacity” should be included in the power of attorney, along with a method of presenting the existence of a disability or incapacity. This helps the agent and third parties know when the powers pass to the agent. This is necessary because some third parties may be cautious about recognizing the agent’s power to act on behalf of the principal. A statutory power of attorney, simply tracks the language from the State’s letter of attorney statute. To make a legally binding, it must fulfill with all state laws, and should be signed, dated and notarized by the principal.
Medical power of attorney allocates an agent to make health care decisions for the principal when a physician certifies in writing that the principal is no longer able to make these essential decisions. For example, a person is incapable to make health care decisions while in a severe coma. Despite the momentous grant of power, an agent is obligated to follow the principal’s instructions when making decisions on his/her behalf and the principal may retract the authority granted to the Agent. Two witnesses must be present for the signing of the written medical power of attorney, and there are limitations on who may serve as witnesses.
The letter of attorney is a valuable tool that can provide the principal with the peace-of-mind that his/her affairs will be taken care of. If you would like to know more about durable, statutory and medical power of attorney, consult with a trusted legal professional.