When you are unfamiliar with the details of a profession in a foreign industry, it’s easy to get confused with terminology. However, there are certain industries that have a direct impact on our lives, meaning that we still need to have a basic understanding of the jargon.
A power of attorney is an example of a term that has developed a cloud of misunderstanding associated with the description.
What is a Power of Attorney?
Essentially, a power of attorney (POA) is a document that gives a third party agent permission to act and make a decision on behalf of the principal individual. For example, if someone suffers from a mental condition and becomes mentally incapacitated, or suffers from old age and is too frail to physically sign documents.
A durable POA allows the assigned agent to act on behalf of the principal, even if the principal is mentally incompetent.
A POA can be used for either specific matters, or all matters, and play an important role in helping to make important life decisions. A written document is used to confirm the appointment of one person to act as an agent of authority for the principal individual.
Transferring authority to another person is a big decision, and one not to be taken lightly. Before signing a document that carries so much weight, it’s important to get sound legal advice and debunk some myths associated with the title.
You Don’t Need to Be Legally Competent to Sign a POA
This couldn’t be further from the truth, but instead, this assumption is one of the most common misconceptions attached to a POA.
In order to sign a POA, or any other legal document, the principal individual needs to be legally competent. This means that the individual needs to have the mental capacity to participate in legal proceedings and transactions.
The POA is Effective After You Die
False. A POA is only effective while you are alive. If you pass away, then the POA dies with you and cannot be activated.
Both a special POA, which handles very specific matters and a general POA becomes effective immediately after signing. It is without limitations, except for the fact that it becomes obsolete once the principal individual passes away.
A POA Can Authorize Medical Decisions
A POA only gives authority for the third-party agent to make financial and business decisions, but not medical decisions.
In some states, a medical POA is acknowledged as a separate document and is sometimes referred to as a healthcare proxy or living will. This allows an individual to make medical decisions on behalf of another if they are unable to make the decision themselves. Florida is one of these states.
Estate Planning Can Be Altered By a POA
While a POA does allow someone to make financial and business decisions, it doesn’t allow for the creation of a will, or any adaptations to be made to an existing one.
In order to draft a legal document that dictates what will happen to your estate, advice from an experienced estate planning lawyer who is familiar with the state’s legal requirements is advised.
You Can Find a POA Document on the Internet
This misconception is half-true. Yes, you can find a POA on the internet, but you should never use this as a reliable and legally binding POA.
Always make sure that you get legal counsel when drafting a POA to ensure that the document covers the legal requirements of your state, represents the correct situational details, is current with legal requirements and includes the right authorities.
Assigning a Power of Attorney
The legal requirements for a POA are simple – soundness of mind and witnesses. The powerful legal document should be drawn up with an attorney so that it accurately meets the person’s specific circumstances.
If you need help to draw up an accurate and relevant POA, give us a call at 1-877-815-4560. With more than 50 years serving South Florida, you can be sure that can count on our legal services.