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What Is A Power Of Attorney And Why You Need It? Three Things To Consider

A POA ensures your family members are protected from unnecessary disputes over your wishes regarding finances, medical treatment, etc., after you are incapacitated or have died, and avoid lawsuits.

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Outlook Money
January 22, 2024
Power of Attorney

Power of Attorney

Power of Attorney (POA) is a legal document you (the principal) create to authorize another person (the agent), also called the “Attorney In Fact”, to decide on your behalf. Both the principal and the agent sign the POA in the presence of a witness. A POA can be related to all issues, from financial and medical to property, meaning the agent will represent the principal in any legal matters when needed. Usually, POA is created for two reasons: medical care, where the agent can decide which treatment to pursue or when to end the principal’s life-support care or donate the organs, and to manage the principal’s finances as they see fit.

 Also Read: How Should Single People Plan Their Inheritance?

Dismissal of Power Of Attorney

A POA can be revoked if the principal revokes the agreement or dies. The court can also invalidate the POA on evidence that the agent can no longer make appropriate decisions for the principal. POAs are of two types: Durable and Springing POAs based on the principal’s need. A durable POA is effective when the principal and the agent both sign the document obtained online or through a lawyer. Springing POA, conversely, comes into effect when the principal cannot make sound decisions.

 Also Read: What Is The Right Time To Make A Will, And What All Can It Include?

Advantage Of POA

Decisions In Your Favour: You can choose an agent you trust who will do the right thing if you become incapacitated. It will give you a sense of security and freedom. In the absence of a POA, a guardianship is established. In financial matters, the probate court sets a guardian or a conservator to control the finances and assets.

 Making Your Intent Clear: Many court cases drag on endlessly due to the non-clarity of the intent if the principal dies. A POA designated by you has the agent’s name and directions, which can help establish what you wish and avoid expensive, lengthy court battles that go on for months and years.

Define the Power: A POA defines how much control the agent would have on your assets. It is helpful in cases where you think the agent might misuse their power due to personal conflicts with other family members. A person can also name multiple agents in a POA document and instruct whether they should act separately or jointly. For instance, if a man’s wife has no business experience, he could appoint his sibling or friend as an agent to manage his finances.

Also Read: 5 Things That Senior Citizens Must Mention In Their Will

Thus, a POA ensures your family members are protected from unnecessary disputes among themselves after you are incapacitated or have died over your wishes, be it finances, medical treatment, etc. It can avoid bitter lawsuits over your assets or a court-appointed guardianship.

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