Protect Yourself With A Power Of Attorney

Do you take the precaution of giving a trusted friend a spare set of keys to your car? If you do, you may be a wise planner. Planning for eventualities can take many forms, from the old "spare keys" to choosing a trusted friend or relative to give your power of attorney (POA). But the idea is the same.

Just in case an unexpected problem arises, your interests are protected. And if there is no problem, control remains with you.
Here's how a power of attorney works:

Obviously you will only give it to a person you thoroughly trust, such as your adult child or an attorney in whom you have complete confidence.

If you should become unable to act on your own behalf, that person has the legal ability to act for you, but only in ways you specify in advance. For example, you may simply give your adult son the power to pay your bills and endorse checks you receive. Or a more complex POA could permit your adult daughter to pay the bills, endorse checks, and sell your real estate.

A POA is revocable. If you have a falling out with the person who has your POA or for some other reason change your mind, you can simply take back that power. More about this later.

Here are the basic types of POAs:

General: This is a wide-ranging grant of power, allowing a person to do whatever you can do. Legal advisors say you should use this sparingly because of the sweeping authority it provides. If you were to die or become incapacitated, this power would automatically be revoked.
Health care: This gives another person the authority to make medical decisions for you, and it remains effective even if you are mentally incapacitated. To create this type of POA, the form must be notarized and signed in front of witnesses. Like other POAs you can limit the power to specific decisions or give your agent (that is, the person to whom you gave your POA) sweeping power.
Special: This grants your agent authority to act only in specific situations. An example would be the power to conclude a real estate deal while you are traveling abroad.
Springing: This is a POA that only takes effect if you become incapacitated. Legal advisors will likely tell you to be very specific about what will trigger this POA, for example, it may become effective if you were rendered comatose.
Durable: This POA remains effective even if you become incapacitated or incompetent. A Durable POA generally requires that you appoint a relative to be your agent. It involves limited powers, but can be put in place for longer periods of time. If you are married, depending on which state you live in, your spouse may not be able to conduct real estate transactions without your durable POA.

Durable POAs take two forms, medical, and financial. You may want to consider giving these two types of powers to two different agents.

Durable POAs end in one of several ways: automatically when you pass away (which means if you want that person to wind up your affairs, you will need to name that person as executor of your will). A durable POA may also end if you revoke it because your mental capacity has returned, a court concludes you signed it under duress, your agent is unavailable, or if your agent was your spouse and you are now divorced.

How do you revoke a POA you've established?

Let your agent know in writing that you are revoking the POA and ask him/her to return all copies.
Notify any financial institutions where your agent has used the POA that you are revoking the power.
If the POA has been filed with the County Clerk's office, contact them to find out how to file a revocation of the POA.

A solid POA can provide a great deal of peace of mind, assuming that you have confidence in the person you choose as your agent. It's a good idea to have an able legal advisor help you with this process.

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