There are many cases in which a Power of Attorney is not only a smart step to take, but an essential one. A Power of Attorney gives your "agent," the person you name as your POA, the ability to make financial decisions on your behalf. They can open or close bank accounts, take out loans, and even sell your property. It's a great deal of authority to give away, but if you're ill or afraid that you won't make sound financial decisions, a Power of Attorney may be the best route for you.
Choose a person to be the agent. The agent is the person who will be given the responsibility of making decisions on your behalf. The agent should be someone who is trustworthy and able to make decisions that that may be difficult at times. The agent should be someone who will keep your best interest in mind when doing business in your name. Many people choose family members or friends; however, some choose unbiased parties such as attorneys to act as their agent. This decision is one that should not be made lightly, as it can impact you for many years.
Obtain the correct from for the Power of Attorney. In each state this form varies. Forms can be obtained online (see resources below) or through a law office. Depending on the type of Power of Attorney being granted, a lawyer is not always necessary. However, if the principal has significant financial or property holdings, it's a good idea to consult a legal expert.
Complete the Power of Attorney form. Include all relevant information. The form will need to be signed by both the principal and the agent, and witnessed by a notary public in order to be legally binding.
Provide the agent with a copy of the Power of Attorney. The principal should keep the original for their records. Both copies can be retained by the principal until she is ready to allow the agent to start making decisions on her behalf.
- A person who is not of sound mind cannot grant power of attorney. The best practice is to set up a power of attorney as soon as possible.
- The agent and the principal should keep records of all transactions completed. This will provide a reference, should there be any questions.