Power of Attorney
Structure and Requirements
To create a power of attorney, the government requires that an individual must be an adult, meaning he or she is at least 18 years of age. The person must also be in sound mental capacity when he or she creates the power of attorney. The individual who is giving away the power is called the grantor, while the person who is appointed to receive the power is called the agent, or attorney-in-fact.
The time at which the power of attorney will take effect depends on its form: durable or springing. A durable power of attorney immediately transfers power to the agent as soon as it is signed and stays in effect until the grantor revokes it or passes away. A
springing power of attorney, on the other hand, takes effect as soon as a physician declares that an individual is incapacitated.
What do I include in a power of attorney?
Before beginning the draft of a power of attorney, it is important to research state laws. Each state has its own requirements for power of attorney, so make sure that your power of attorney is following all the rules. An estate planning lawyer in your area will be able to advise you on the different state laws and help you to write the document accordingly.
First, name all the parties involved in the transfer of authority. Give your name and contact information along with the agent's name and contact information. You should also include a successor agent, in case the first agent is unable to make decisions. In this section, also include the information of any institutions with which the agent will be interacting, such as hospitals, insurance companies, and banks.
Next, state the specific powers that you wish your agent to have. You may give them full range over your affairs, or you can give them authority for specific actions. These may include but are not limited to any of the following:
- Managing real estate and businesses
- Paying bills
- Investing assets
- Filing taxes
- Collecting government benefits
- Handling legal matters
- Make medical decisions
After you list out the agent's powers, identify the durability of the document. Do you want the agent to have authority as soon as the document is signed or after a specific event? Will the power of attorney come to an end after the agent completes a specific task? These are all things you must specify in your document so that it will fully carry out all your wishes.
Legalizing Power of Attorney
Once you are finished drafting the document, have an estate planning attorney look over it to make sure that it is in alignment with all state procedure. Sign the document along with your agent and get it notarized to make it legal. Some states might also ask you to sign it in the presence of two adult witnesses. It may be wise to have more than the required number of witnesses so that these can attest to the validity of the document.
After you sign it, you should immediately get a physician's statement that certifies that you were sound of mind when you created the power of attorney. It may also be wise to video record the signing of the document so that there is visual record of your competence. Your lawyer and any witnesses can also attest to your mental capacity should there be any questions.