At some point in your life you may be asked to execute a power of attorney and/or you may feel that you should create a power of attorney yourself for one reason or another. While a power of attorney can be an extremely useful legal instrument it is of the utmost important that you understand the advantages and disadvantages, as well as the authority granted and the limitations, of a power of attorney.
Despite the name, a power of attorney does not involve an attorney at all unless your attorney drafts the document. There are two people involved in a power of attorney-the principal and the agent. If you are the person creating and executing the power of attorney that you are known as the principle. The person to whom you grant authority, or power, is known as the agent.
There are two basic types of powers of attorney-general and limited. A general power of attorney grants very broad powerS to your agent. Typically, an agent who holds a general power of attorney is able to do things such as withdraw funds from your bank account, sell your vehicle, and even enter into a contract in your name. For obvious reasons, you should use extreme caution when granting someone in general power of attorney.
A limited power of attorney only grants your agent specific powers or authority. You might, for example, gives someone limited power of attorney to stand in for you at the closing of a property you are selling because you plan to be out of the state on the date of closing. In that case, your agent only has the authority to do what is specifically outlined in the power of attorney, in this case represent you at the closing.
Traditionally, a power of attorney automatically terminated upon the death or incapacity of the principal. This was inconvenient as the point of a power of attorney is often to appoint someone who has the authority to step in should you become disabled or otherwise incapacitated. For this reason, the durable power of attorney was created. Any power of attorney with the proper language in it may become “durable”, meaning that it will survive your incapacity.
The state of Illinois also recognizes to specific powers of attorney. The first is a power of attorney for property which allows you to appoint an agent to make property decisions for you should you become incapacitated. The second is a power of attorney for healthcare. This document allows you to designate an agent he will make health care decisions for you should you be unable to do so for yourself at some point in the future.
Unfortunately, unscrupulous individuals often pray on the elderly and frequently use a power of attorney to do so. If someone asks you to execute a power of attorney for any reason always consult with your estate planning attorney before signing the document.
Latest posts by arlenec (see all)
- My Parent/Spouse Shows Early Signs of Dementia. Can We Still Do Medicaid Planning? - July 20, 2015
- What Happens to a Living Trust When One Spouse Dies? - July 13, 2015
- Medicaid Spousal Impoverishment Rules - July 7, 2015