Entrusting someone with power of attorney is a big step, but a simple one – it's a matter of drafting what's usually just a single-page document. It might be necessary if you’re concerned that you won’t be able to handle your own affairs at some point. Your agent or attorney-in-fact – the individual to whom you’re giving power of attorney – is obligated by law to protect you, your assets and your money. She can act for you when and if you can’t, but this doesn’t prevent you from handling your affairs yourself as long as you’re able.
Decide What Power You Want to Give
The first step in giving someone power of attorney is to decide just what it is that you want her to do for and when you want her to do it. You can create a financial power of attorney to deal with your personal business, or a health care POA so your agent can make medical decisions on your behalf in an emergency. An agent with a power of attorney for health care can only instruct physicians to follow the decisions you’ve laid out in the document. A health care POA doesn’t allow her to override your stated wishes.
A financial power of attorney can be either “durable” or “springing.” If you give your agent durable power of attorney, it means she can act for you currently and later, after you become incapacitated. A springing power of attorney doesn’t give her the right to act for you unless or until you become incapacitated or some other designated event occurs.
Draft the Document
Drafting a power of attorney can be as simple as visiting your state’s website or your local courthouse. Most states have statutory forms for such documents. If you decide to draft your own, you might want to take it to a lawyer for review before you sign it to make sure it really does express your intentions.
At a minimum, your POA should clearly lay out what actions you’re allowing your agent to take. The more specific the language is, the better. If you want the power of attorney to be durable, you must make it clear that any potential incapacitation doesn’t revoke the document. You and your agent must sign the POA and you must also have it notarized in most states.
Although it’s not usually necessary to file your POA with the court, rules differ by state. Check with a local attorney or courthouse staff to learn what’s required where you live. Even if you don’t have to file a copy of your POA, you might want to make sure that anyone who is affected by it has one. This might include your physician for a health care POA or your banking institution for a financial POA. Some states require that if you’re giving your agent the right to buy or sell real estate on your behalf, you must submit a copy of your POA to your county’s land records office or clerk.
Revoking the POA
Certain events can revoke your power of attorney even if you don’t intend for it to happen, so you might think you have a valid POA in place when, in fact, you don’t. In many states, divorce voids your POA if you’ve named your spouse as your agent. Even a legal separation may end your spouse’s rights to act on your behalf. Your death always revokes a power of attorney, but you can revoke your POA yourself at any time if you change your mind about it as long as you are of sound mind to do so. If you want to give someone power of attorney on just a temporary basis, such as while you’re out of the country or on vacation, you can include this in the document, citing a specific date, time or event when the POA will expire.