What Does Power Of Attorney Mean?
The basic idea of power of attorney is that there is a document that you sign that allows another person or even an organization to handle your affairs. It is used so that if you are not able to handle your affairs or are unavailable to handle them, there is someone else that has been appointed to make sure that decisions are still made. The person that is chosen can be anyone, it does not need to be a family member or other type of relative or close association. When it is given to the other person, they are referred to as an Agent or Attorney-in-Fact.
There are four different types of power of attorney that a person can grant to another person or organization. These are a general which will fulfill activities on your behalf. These can be for a variety of situations and reasons. A special attorney is when the power is granted to another person, but only for certain situations. A health lawyer acts on your behalf in all health care related matters. This is usually only used when the person is incapacitated. Lastly, there is a durable lawyer and this covers the general, special and health areas. This type makes decisions in all areas and the document signed is made to reflect this. However, they only have this type of power when you become or are mentally incompetent. With each type of lawyer, there is also the revocation of power of attorney. This a document revoking all rights from the said person or organization as your power of attorney.
One of the most common situations is the general document. This is very broad and can cover a range of areas. It gives the signed person extensive power over the person. A power of attorney agent can cover numerous areas of a person’s life. These can include, but are not limited to, safety deposit box transactions, bank transactions, U.S. security transactions, purchasing life insurance, claim settlements, stock rights and option transactions, signing contracts, buying property, as well as selling property, the filing of tax returns, government benefit matters and buying real estate, selling real estate and managing real estate properties.
However, some people may also allow a general power of attorney to maintain business interests, operate the business, provide gifting to organizations, hire assistants, creating living trusts and create disclaiming interests as well when it comes to estate planning and taxes.
A general power of attorney should be used when you can not complete these transactions and affairs yourself. This can be while you are out of the country, while hospitalized, mentally unable to complete the tasks or physically unable to complete them. General power of attorneys are used to ensure that the estate and associated businesses, properties and financial affairs are handled in the event that you can not take care of them.