Understanding 'Power of Attorney'
What is a 'Power of Attorney'?
A Power of Attorney (POA) is a legal document that grants an individual, known as an Agent or "Attorney-in-Fact," the authority to make decisions and take actions on your behalf if you are unable to do so due to medical or other reasons. This can include managing your financial affairs, operating your business, and ensuring your personal bills are paid. Without a POA, your loved ones might face costly and lengthy court proceedings to handle these matters during already difficult times.
There are generally two types of Powers of Attorney:
- Medical Power of Attorney: This names agents to make healthcare and medical decisions on your behalf. In some states, the medical power of attorney may be a part of a living will or health care directive. For more details, refer to our article on "Understanding 'Living Will' and 'Advance Healthcare Directive'".
- Financial Power of Attorney: This names Agents to handle financial and business decisions on your behalf. Financial powers of attorney may be broad and apply to nearly any non-medical decision. This type of POA is covered in more detail in the rest of this article.
Why do I need a Power of Attorney?
Prevents Court Proceedings: A POA helps avoid the need for court intervention, saving time and money.
Ensures Continuity: It allows your affairs to be managed according to your wishes, even in your absence or incapacity.
Essential for Estate Planning: Accidents and illnesses can occur unexpectedly, making a POA a vital part of any Estate Plan to protect yourself and your family.
Choosing Your Power of Attorney Agent
The choice of Agent is crucial, as they will have significant power to act on your behalf. Trust is paramount. It's advisable to select someone reliable and capable, such as a family member, close friend, or business partner, depending on the responsibilities they may need to undertake.
Considering the Scope of Tasks:
Given the wide range of tasks that an Agent may need to handle, from personal finances to business operations, choosing an Agent with the right skill set and integrity is essential.
Granting Authority:
You decide whether the Agent's authority is broad or limited to specific tasks. You can also specify whether the Agent's powers take effect immediately or only under certain conditions, such as if you become incapacitated.
Expiration of Powers:
You have the option to set an expiration date for the POA or determine it based on certain events.
Key Points:
- Trustworthiness: Choose an Agent you trust to act in your best interests.
- Competence: Consider the Agent's skills and abilities to handle the tasks required.
- Scope of Authority: Decide whether the Agent's authority should be broad or limited.
- Timing: Specify when the Agent's powers should take effect.
- Expiration: Determine whether the POA has an expiration date or is contingent on certain events.
By carefully considering these factors, you can choose an Agent who will effectively represent your interests and manage your affairs according to your wishes.
Updating an Existing Power of Attorney
While you cannot directly modify an existing POA document through FastWill, creating a new POA can effectively replace an old one, depending on the terms set forth in the original document. For legal compliance and clarity, we provide a state-specific POA template with each Estate Plan, which must be completed by hand. Revoking an existing POA before activating a new one is a safe practice to ensure only the most recent POA is recognized.
Can I fill out my Power of Attorney online?
Due to state legal requirements, your Power of Attorney will need to be completed by hand, not filled in online. Once you purchase your Estate Plan, you can either download the template from your account or request to have it shipped.
Once you have the physical copy of the Power of Attorney template, complete the document as directed within the instructions on each page. This primarily involves initials, signatures, and contact information depending on your state.
Can I edit the Power of Attorney template?
No, you cannot directly edit the content of the template we provide via the platform.
Is the FastWill template for a 'durable' POA?
Yes, the template we provide is for a durable Power of Attorney.
How do I create a 'Power of Attorney' document?
When you purchase an Estate Plan, we provide a state-specific POA template.
- Obtain the Template: Download the template from your account or request to have it shipped along with your other documents.
- Complete the Document: Fill out each section of the document by hand, following the instructions on each page.
- Get Signatures and Notarization: Obtain witness signatures and have the document notarized.
- Safekeeping: Keep the completed POA in a safe place with your other Estate Plan documents.
By following these steps, you can ensure that your Power of Attorney document is properly executed and legally valid.
How to Access Your 'Power of Attorney' Document
You can view, download, or print your Power of Attorney directly from the Estate Plan tab.
Why Do I Need to Enter My Date of Birth?
Date of birth is a crucial piece of information for estate planning. Many states have minimum age requirements for creating legally valid estate planning documents. Additionally, the date of birth may be required for certain documents. It's also helpful as it can be relevant for related considerations, such as age-based eligibility for benefits and retirement plan withdrawals.