A Power of Attorney (POA) authorizes a third party to act on your behalf. You name an agent who must look out for your interests in accordance with your instructions in the document. In estate planning, there are usually two types: for property and for healthcare. These documents are also usually drafted so the authority survives incapacity, legal, medical, or otherwise. Powers of Attorney may be effective immediately, or may become effective at a certain time or when a specified condition occurs.
How Does a Power of Attorney Work?
Power of Attorney is an agency relationship. The one who grants the authority to act is the Principal. The one to whom the Principal grants authority is the Agent. A well-drafted POA is almost always in writing. It will lay out the powers and responsibilities the Principal gives to the Agent.
The Agent owes a fiduciary duty to the Principal. This means that the law requires the Agent to act in the Principal’s best interests, and not for his/her own gain. If the Agent misuses the power granted, he or she can be liable for damages for breach of fiduciary duty. Thus, it is very important that the Agent be a highly trustworthy and competent person.
Power of Attorney for Property
A Power of Attorney for Property, sometimes known as a General Power of Attorney, empowers the Agent to manage the Principal’s financial affairs. This generally includes banking, bills, utilities, insurance, and other typical day-to-day financial matters. A POA for Property may also authorize the Agent to operate the Principal’s business if he or she is incapacitated.
Many financial institutions are increasingly picky when it comes to honoring a POA. To best protect your financial interests, these documents should be clear and expressly lay out the authority the Agent has. The document should thoroughly list enumerated powers to minimize the risk of a third-party claiming there is no authority
Power of Attorney for Healthcare
A Power of Attorney for Healthcare is separate from a power of attorney for property. This document specifically covers healthcare matters only. It enables your Agent to communicate with your providers and make healthcare decisions on your behalf if you are unable to do so.
The POA for Healthcare typically has a HIPAA waiver. This is especially important, as state and federal law protect health information as confidential. The waiver enables your Agent to access important information regarding your care, and to discuss healthcare needs at a time when quick decisions may be necessary. You may also name an attending physician in the document.
Set Up your POA with Assistance from Connell Law, PLLC
Connell Law, PLLC assists residents of Rutherford County and the surrounding area with thorough and detailed Powers of Attorney. Reach out to us today to schedule your free consultation.