A power of attorney is a legal document that allows you to name someone you trust to make financial, business and legal decisions on your behalf. It provides a convenient means of having your affairs looked after when you are away or simply unable to do so on your own. The potential for abuse may outweigh the convenience of having an agent with a power of attorney.
A power of attorney is a legal document by which you, as principal, designate another person to act as your agent to make decisions and enter into transactions on your behalf. The authority you give to your agent can be as broad or as limited as you want to make it. A durable power of attorney is one that your agent may use even if you become incompetent.
Read More: Risks of a Financial Power of Attorney
Powers
You may grant your agent the authority to handle your business, banking, real estate, insurance, investment, pension and gift transactions. A power of attorney may even be used for litigation purposes. You can limit or expand the amount of authority your agent has in the power of attorney.
Advantages
A power of attorney is an easy way to have another person handle legal or financial matters for you when you are away or otherwise unable to handle them for yourself. A durable power of attorney is a protection against costly court proceedings in the event you become incompetent. In that situation, your agent can handle your affairs without the need for a guardian or conservator being appointed by a court.
Disadvantages
A power of attorney ends at your death. Therefore, it is not a substitute for a last will and testament or a trust that designates a representative to handle your affairs upon your death. A power of attorney can be abused by your agent because there is no oversight of his activities by anyone other than you. If you become incompetent or incapacitated, your agent may have no one overseeing his actions. The best way to protect yourself is to make certain that the person you select as your agent is someone you trust.