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What is a Power of Attorney?

 

[caption id="attachment_4332" align="alignleft" width="230"] Power of Attorney[/caption]

A durable power of attorney, a POA, permits an elderly person to designate an individual who she or he trusts, be it a friend or a relative.  The designated person is known  as an 'agent' who tackles specific responsibilities related to health, legal or finance on behalf of the elderly person. You, on the other hand, will be known as a principal; an individual who gives the authority to another to act on your behalf.

Medical and Financial Powers of Attorney


Power of Attorney's are of two types, namely, POA for healthcare and POA for finance. POA for healthcare allows the the agent to to make health care choices on the authority of the person whereas POA for finances allows the agent to make legal or financial choices on his or her behalf.

The Power of Attorney is effective immediately after you sign it. However, you may state that the POA will take immediate effect in the case of an event in the future; in which case these are referred to as 'springing' powers. Often times the Power of Attorney becomes effective when the elderly person becomes disabled, indisposed or incompetent.



"What can I authorize my  agent to do on my behalf?"


An agent can do several things on your behalf, you can authorize him or her to:-




  • Make health care decisions for you

  • Manage your business

  • Buy or sell items for you

  • Settle  debts

  • Cash cheques

  • Invest

  • Sue on your behalf

  • Manage general financial matters


Considerations


Before you appoint a person as your agent, you need to consider certain things. For example:-

  • How trustworthy the person is?

  • How responsibilities he or she is?

  • Should I give this person to make decisions about my medical care? personal care? property?

  • Will this person be honored by my bank, other companies and business dealers?

  •  Should I place any safeguards for a particular decision?

  • Who should decide that I am incapacitated?

  • In what degree should one deem me as incapacitated?


Revoking a Power of Attorney


Revoking the power of attorney is an easy process. The principal can revoke the POA provided he or she is not incapacitated. The principal will first inform the agent that the durable power of  attorney has been revoked. He or she can do so in writing, which is a preferred method of communication.  The principal should also inform the bank and other counter parts where the agent did business or any financial transactions with.