Financial Matters
What Is Power of Attorney? Power of attorney, or POA, is a legal document giving an attorney-in-charge or legal agent the authority to act on behalf of the principal. The attorney in charge possesses broad or limited authority to act on behalf of the principal. The agent can make decisions regarding medical care, financial matters, or property on behalf of the principal. A power of attorney comes into play in the event that the principal is incapacitated by an illness or disability. The agent may also act on behalf of the principal in case the person is not readily available to sign off on financial or legal transactions. The power of attorney lapses when the creator dies, revokes it, or when it is invalidated by a court of law. A POA also ends when the creator divorces a spouse charged with a power of attorney or when an agent is not able to continue carrying out outlined duties.
Types of Powers of Attorney 1. General Power of Attorney The general power of attorney is a broad mandate that gives an agent a lot of power to handle the affairs of a principal. The agent or the person designated to act on behalf of the principal is charged with handling several tasks. The tasks include buying or disposing of real estate or even entering into contractual relationships on the principal’s behalf. 2. Limited or Special Power of Attorney An individual looking to limit how much the agent can do should choose limited or special power of attorney. Before signing to notarize a limited power of attorney, a person needs to be as detailed as possible about how much the agent should handle. If an individual is not clear what should fall under the special power of attorney, it is best to speak to a legal counsel.
70 the ANALYST Volume 28 Number 1
