By Team Tomorrow
Published October 25, 2019
A power of attorney is a document giving someone else authority to represent you in various capacities. Having a power of attorney is a common part of a comprehensive estate plan, and can be helpful now, if you like, or reserved for later, in the event you become incapacitated.
But how do you choose an agent? And what can they do for you? Having a power of attorney can be enormously helpful, if you have someone you trust.
What you want a power of attorney to include depends on you. It can be general, and cover all kinds of business activities, for example, or it can be specific, giving authority for one specific activity, like signing a certain contract or making medical decisions. It can be effective as soon as it is signed, or it can go into effect if you become incapacitated. The most important part is that the document is clear as to what duties and responsibilities are being granted.
An agent is expected to act as a fiduciary, and will be held to high standards of good faith and fair dealing with respect to their acts and duties.
Most people choose a family member to act as their agent, but a trusted friend or associate can also be a good choice. You can name more than one person as agent, but that may get sticky if the co-agents disagree. It is also a good idea to name one or more successor agents in case the person you name is unable or unwilling to act as agent.
Yes, you can. In fact, it would be a good idea to review your designation every few years to make sure they are still a good fit. The person you choose originally may no longer be up to the task of acting as your agent later on, or perhaps you will have moved and prefer to find someone who is local to be your agent. Whatever the reason may be, you can decide to change who you have designated as your agent.
In some states, you may need to actually sign a document revoking the power of attorney designation, so be sure to check your state laws.
If you choose a family member or friend as your agent, generally they do not expect to be paid to act as your agent. However, if you choose a professional, like a lawyer or accountant, you will generally be expected to pay them to be your agent. Any agreement about compensation should be included or mentioned in the power of attorney.
In most cases, having a copy of the power of attorney plus an identification card will be enough for your agent to sign papers or make decisions in your name. If they do sign papers in your name, the signature should indicate they are signing for you, as your POA or attorney-in-fact.
In some states, a power of attorney must be renewed. Most states, however, allow for a “durable power of attorney,” which stays in effect until your death (or until you revoke the appointment).
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