Almost everyone has heard of a Power of Attorney (POA), but not everyone actually understands what a POA is, or why having one is important. A POA is a written document that allows you to legally assign another person to do specific acts for you. This can be especially important if you are getting older, leaving the country, or are otherwise indisposed. This appointed person will act as an “agent” on your behalf, and can do things such as signing your name for you, handling your financial affairs, and taking care of a variety of other functions.
Examples of Function
If you were to become mentally incompetent or physically incapacitated, the person you have given POA could continue to pay your monthly bills on time so your mortgage is current and your gas and electricity are not shut off. An agent with POA may also execute a stock power, handle a tax audit, and maintain a safe-deposit box.
Duration of a POA
You, the “principal,” have the power to revoke the POA at any time. If you never revoke a POA, it will generally expire when you die. Because it expires, it is not a substitute for having a valid will or trust. However, a POA is still a helpful estate planning tool. For example, an agent with POA can put your assets in the name of your trust to make sure the trust is funded.
Requirements of a POA
The requirements for a valid POA are different in many states. There are also different requirements for different types of POAs, such as Durable POAs, POAs for childcare, and Limited POAs. That said, most states typically require a written document signed by the principal, some evidence that the principal was competent, and notarization. Some states also require witnesses to the signature, but even if a witness is not required, it is still important to take measures protecting the powers being granted. That is why it is always recommended you consult an attorney when executing a Power of Attorney.
Dennis Astill has provided high quality legal services in the Salt Lake City area for over 25 years, representing individuals as well as public and private companies. The Astill Law Office focuses on estate planning and business and tax matters. If you have any questions about creating a Power of Attorney or estate planning in general, contact The Astill Law Office at 801-438-8698.