In today’s blog post about basic estate planning questions, we are going to turn our attention to powers of attorney. Like other essential estate planning topics, it is in your best interest to, at the very least, understand what a power of attorney is, how it works, and why it plays such an important role in your estate plan. Though you do not have to know everything there is to know about these tools, you should have a basic understanding of a power of attorney before you start making decisions about your plan.
So, let’s take a look at some common questions about powers of attorney.
What is a power of attorney?
A power of attorney is simply a special kind of legal document. Through a power of attorney, any capable adult can give someone else the ability to make decisions on his or her behalf. A power of attorney, therefore, is the way you delegate your legal decision-making authority to another.
A person who makes a power of attorney has to be at least 18 years old, must be mentally competent, and must create a document that complies with specific Florida laws. The person delegating authority is known as a principal, while the person receiving the authority is called the agent or the attorney-in-fact. The agent can be any willing and capable adult, or an organization.
What role does my attorney play?
One of the most common way’s people get confused over a power of attorney stems from the language of its name. A power of attorney is not something that requires you to be a lawyer, hire a lawyer, or become a lawyer. The word “attorney” in this sense simply means someone you appoint as your representative. A power of attorney is just a document that gives a representative the right, or “power,” to make certain types of choices for you.
However, as with all legal documents, it’s always best to have a lawyer create your powers of attorney for you. Though you have no legal obligation to hire an attorney to create a power of attorney, failing to create these documents properly can cause significant problems.
How do they work?
A power of attorney is a simple, but rather flexible document. Basically, all you have to do to create a power of attorney is name your chosen agent and set out what you want your agent to be able to do for you. (Of course, there are some formal requirements, but your attorney will tell you about those.) Once you create the document, the agent can then use it to prove that he or she has the ability to make decisions for you. The agent can even act for you if you become incapacitated and can no longer make decisions for yourself.