Power of Attorney acts as a legal instrument to transfer all the legal authority to another person. The one who signs the Power of Attorney is the Principal, and the person to whom the legal authority has been transferred is called the Attorney-in-Fact or Agent.
This is usually done to make decisions regarding legal, financial, and property related issues. The most common situations for such transference can be Principal’s disability or illness, or even at times when the principal cannot be present to sign some legal documents. Consult a lawyer and study the documentation carefully before signing since it is an important legal matter.
The Power of Attorney can be classified into three categories such as Non-durable, Durable, and Springing.
The Non durable Power of Attorney, as the name suggests is valid only for a fixed period until the Principal withdraw from it, or if the Principal becomes mentally incompetent or if he passes away. In this type of attorney, the authority that comes into action is immediate. It is mostly used for the sale of residence, or to handle the financial affairs of the Principal while traveling abroad.
While Durable Power of Attorney is also effective until the Principal dies or revokes
it. It gives the Agent the authority to work for the Principal even when the Principal is mentally incompetent and physically competent.
Were as in Springing Power of Attorney, it becomes effective only at a later date. As the name suggests the legal authority springs into action at certain events or conditions chosen by the Principal. It is often disability or illness of the Principal. The Agent needs to take decision only when the Principal’s physician acknowledges that the Principal is not able to handle any financial affairs. It remains in power until the death of the Principal, or the court withdraws it.
The Power of Attorney has to be either typed or written in a form, which is mentioned in the General Obligations Law. Among the three types of attorneys, Durable and Springing Power of Attorney is a safety precaution for the Principle’s future disability that may happen and would be helpful in dealing with financial affairs during the incompetence.
As an Agent you have the legal powers to buy or sell real estate, perform banking transaction such as investment and withdrawals, can conduct litigation and legal claims. But the agent is not given the authority to perform medical decision regarding the health of the Principal.
While choosing a Power of Attorney one should keep in mind that he or she is trustworthy, because this process is much similar to signing a blank check. One can either opt for a family member or a friend who is trustworthy, or even a professional who is reputed for outstanding honesty.
The Principal also has the authority to appoint more than one Power of Attorney. Even when the Agents are expected to be obliged there can be chances of dishonesty, stealing and abuse, and it is the responsibility of the Principal to monitor the Agent. So give much care and attention while appointing a Power of Attorney.
If you are not satisfied with your Agent you may revoke the power of attorney and make sure that the agent is informed in writing.