Previous
Previous
TIDBIT: Short Trust Names
Next
Next
Powers of Attorney
By Hanah Mirahmadi
A power of attorney is a very powerful document. They are used to appoint someone else to make financial decisions for you. The person you appoint, and any alternates, is called your agent or attorney-in-fact.
You can specify in your power of attorney whether you would like your agent’s authority to take effect immediately, have it be delayed, or a hybrid of both. Immediate authority is where, upon executing your power of attorney, your agent can make financial decisions on your behalf immediately.
On the other hand, delayed authority is where your power of attorney can only make financial decisions on your behalf in the event of your disability or incompetence. Typically, proving your disability or incompetence requires a written statement from your physician indicating that you lack the ability to make and communicate decisions or evaluate information necessary to make a decision. You can decide whether a written statement from one physician is sufficient or you can require additional written statements if you feel one is not enough. Requiring too many written statements, however, may cause additional delay in granting your agent authority. This can create issues if it is a time sensitive financial situation.
With the hybrid option, you can elect to have some agents take control immediately while others can take under delayed authority. This option works well for spouses who name each other without delay and name an alternative agent whose authority is delayed.
Once your agent is granted authority, your agent can pretty much do anything with your finances that you could. For example, if you are stuck in the hospital and cannot pay your bills, your agent can. Your agent can also, however, act on your behalf to sell your car or house without you knowing or even empty your back account. Clearly, it is really important that you take care in deciding who you name as your agent.
Give us a call to talk more about powers of attorney and how we can get one set up for you.