Types of Powers of Attorney

There are two types of powers of attorney. A “general” power of attorney is unlimited in scope and duration, and permits the named individual to act as your legal representative in relation to financial matters until such time as it is revoked.

A “specific” power of attorney imposes limits upon the named representative, and may restrict the scope of that person’s powers to a single type of conduct or a single transaction. For example, the representative might be used to sign the contracts on a real estate transaction or to deal with financial commitments while abroad.

It is possible to have a duration on the time a Power of Attorney is affective. Stop date can be drafted in to the document and will prevent the abuse of the power.

Power of attorney’s do not have to be registered with the state. However, if a power of attorney grants somebody the right to engage in transactions relating to real estate, it may be necessary to record the form.

Terminating a Power of Attorney

The Power of Attorney can be terminated at any time and the process can be instant, in all that has to be done is  destroy the original powers of attorney and any copies and inform the attorney that the Power of Attorney no longer exists.

When Does a Power of Attorney Become Effective?

A Power of Attorney will become effective at the time it is signed. However there are some Power of Attornies that can be become effective on a future date or upon a specific event.

Planning for Medical OR Mental Incapability

A Power of Attorney is sometimes made in anticipation of a medical or mental emergency or incapability. You may find that you are in a position where you are unable to articulate your own wishes, a medical power of attorney allows you to choose in advance who will represent your interests, and can impose upon them the restrictions you wish. You may want the Power of Attorney to be used in conjunction with a Living Will where the Attorney uses the instruction from the living will to carry out and deal with the financial transactions using the Power of Attorney.

Most people who engage in estate planning in anticipation of possible incapacity or disability obtain both a medical power of attorney and a general power of attorney. This usually allows a trusted person to take care of your finances. As with the medical power of attorney, if there is a lack of any specific instructions the court will appoint somebody to represent your interests.

Please note that powers of attorney issued for the purpose of managing your assets in the event of disability or incapability are always drafted with an indefinite time period and are known as “durable” powers of attorney. Many financial institutions are reluctant to accept or rely upon powers of attorney, which expire after a specific date, and some will refuse to accept them.

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Choosing your representative can be difficult and you should choose your representative with care. The person you give your power of attorney to must be someone you can trust. A trusted friend, family member, lawyer, or even an accountant can make the best representatives. You should choose someone that will make decisions as if you were there personally and will act in your best interest; therefore there should be conflict of interest.

People tend to go for a general power of attorney’s, which usually gives rise to fraudulent transactions. This document will allow your agent to act on your behalf in any matter he or she wishes. Unless there is a reason for giving a general power of attorney, specific or limited power of attorney. This will restrict your representative to only certain transactions or specific events when you say they can act on your behalf. For example if you wanted to your lawyer to sign real estate contract for you on your behalf then you could do that with a limited power of attorney form. You could also add other specific instruction in the power of attorney, such as not selling the house lower then a certain price.

By giving a specified period of how long a power of attorney is valid is an advisable. Most responsible professionals will not accept power of attorneys over the age of one year. Stating an expiry dated on the power of attorney will not require you to revoke it at a later date if you no longer require the representative to act on your behalf.

When revoking your power of attorney, you should also notify all parties that the power of attorney would have been presented to. This will ensure that any professional that your representative has interacted with to deal with your transactions will be aware of your revocation. Also, orally discussing the revocation is also a good idea.

You can choose to file your power of attorney, which is a simple process. It is possible to draft and file your own power of attorney. However, these can be very general but you get companies that will take your instructions and will draft your power of attorney and even file them for you, check out legalzoom.com. Get your Legal Documents Online for up to 85% less than Lawyer Fees