Power of Attorney
The best assurance you have that your financial affairs will be executed as you wish if you become disabled or die unexpectedly is to extend power of attorney (POA) to someone you trust to fulfill your desires.
You can do this on a limited basis regarding just one particular activity or you can opt for permanent authority in what is described as a "springing" POA.
In the event you become unable to make decisions in your own behalf and have not extended POA, a court may be asked to name a guardian for you. Isn't it better for you to make that decision while you are able? All states have provisions for POA, but rules and regulations may differ somewhat, so learn what you could expect to happen in the state where you live.
Your POA agreement should be specific as to what the individual or group you have selected is authorized to do. You may choose one person to act with your legal authority, or a group. But be aware that in groups, there may be differences of opinion as to your wishes. A spouse, family member or very trusted friend is the most frequent choice to be given POA.
Disability is not the only reasons a person may have to make it desirable for someone else to act as his or her official agent. If, for example, you are involved in a real estate transaction and for whatever reason, do not wish to appear in person, your official agent may be given POA authority to act to your specific wishes for that transaction only.
The POA is an important document that can significantly affect your resources. A notary public should be enlisted to make certain all the related documentation is in order.
An example of how POA works: Assume that actor Michael Douglas, for instance, chooses to give POA to his wife, Catherine Zeta-Jones. If ever it were necessary to use her authority under the POA, Zeta-Jones would then sign papers: Michael Douglas by Catherine Zeta-Jones under POA. Or it might be signed Catherine-Zeta Jones, attorney-in-fact for Michael Douglas.
If you are given POA authority and the occasion arises to use it, it might be well to consult an attorney before acting, to be certain you are adhering to the specific powers assigned to you. Being certain before taking the action will prevent challenges. This is especially important if you stand to benefit personally from the action being taken.
What powers would be advisable for you to assign in a POA? They can range from conducting your day-to-day financial affairs to a limited agreement as to how your assets should be distributed upon your demise. How complex your personal finances are, obviously will be a factor. Put all the details clearly into the document without leaving difficulties that could arise in the execution of the POA.
In most instances, your POA will remain valid even if you change states. But if you are considering a move that would change your state of residence, a review of the POA is a good move. Some states used to require a renewal of a POA periodically, but most now recognize a "durable" POA that remains valid until your death unless you take the legal steps to revise it. Even if you are not changing residence, a detailed look at the POA, possibly annually, is wise, as conditions change over time. Once a person dies the POA immediately becomes invalid and the Will or Trust comes into effect. Then the executor of the Will or the executor of the trust has the power.