Assigning power of attorney (POA) to another individual or organization to act as your agent requires a written document that states the authority you are granting and bears your original signature. Most states use the same set of fundamental rules for creating a POA; however, you should familiarize yourself with the specific rules of your jurisdiction to assess whether additional requirements exist. Failure to satisfy all requirements can result in courts declaring the POA is invalid.
Choose the person or organization you wish to act as your agent. When contemplating which person or organization to assign POA to, there are a number of factors you should consider such as trustworthiness, the agent’s knowledge of the transactions and personal issues she will be handling on your behalf and her place of residence or office location.
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Select the type of power you wish to assign to the agent. The three POA categories include the assignment of general powers, special powers and health care powers. General power allows your agent to control most of your personal affairs, the special power limits the types of transactions or issues the agent has authority over and the health care power only allows your agent to make health-related decisions on your behalf when you are mentally incompetent to make such decisions for yourself.
Determine the length of time you need the POA to remain valid. You can assign power to an agent for as short or long of a period as you desire. However, you should carefully choose a duration that is sufficient to meet the underlying purpose of your POA.
Memorialize the POA in writing. If you are not using a standard POA form that’s specific to your state, you must insure that the document is free of ambiguities and provides clear instructions on the powers you are assigning. Drafting a document that includes ambiguous terms makes the POA more vulnerable to validity challenges in court by third parties, which can ultimately frustrate the goals you wish to achieve when creating the POA.
Sign the document in the presence of notary. At a minimum, you must always include the signature of a notary who verifies your identity and is present at the time you sign the POA document. However, it’s also beneficial to include the signature of an additional witness, such as a close family member or friend.
All three types of POAs can include provisions that render it a durable POA. Durability clauses within the POA document allow your agent to continue acting on your behalf in the event you become mentally incompetent prior to the original expiration date. For example, if your POA is valid for three years, and at the end of the third year you become mentally incompetent, durability automatically extends the duration of the document until you regain mental competency. Including a durability clause is important because all state laws deem a POA invalid if you create it during a period you are mentally incompetent.
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