As healthcare improves and people live longer, issues of incapacity become increasingly common. Because of its ease of use and creation, broad grant of authority, flexibility and low cost, the Power of Attorney is perhaps the single most useful planning tool to safeguard against future incapacity.
A Power of Attorney creates a relationship between the principal (the person signing the POA) and the agent (the person receiving authority to act on the principal’s behalf). It allows the agent to act on the principal’s behalf to make financial and business decisions in case the principal is unable.
A “General” Power of Attorney provides a broad grant of authority to the agent. It might allow the agent to do anything the principal could do if personally present. This can be very useful in planning for future incapacity because not all situations are known in advance. Giving the agent flexibility to deal with circumstances as they arise protects against surprises.
On the other hand, a “Limited” Power of Attorney details a specific, limited right for the agent. It might allow the agent to sign a specific document or be limited by date. If you’re planning a trip out of town and have a closing scheduled, a Limited Power of Attorney a friend to sign for you without granting a lot of unnecessary additional powers.
When selecting an agent, trust is by far the most important consideration. This person is going to have access to your bank accounts and other assets, you’ll want to be sure they have your best interests at heart. For more information on Powers or Attorney or selecting an agent, contact Asurest to set up a time to discuss or browse our blog on items of interest.
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