Power of Attorney (POA) is a legal process that allows you, the principal, to designate an individual, known as your “agent,” to manage your affairs if you cannot do so yourself. This legal document is essential for ensuring that your financial, legal, and health-related decisions are in trusted hands during times when you are incapacitated due to illness or otherwise unable to handle your affairs. Anyone who can think clearly and make critical decisions can set a POA up as part of their estate plan. You can even pick a backup, called a “successor agent,” in case your first pick can’t help when needed.
Why it’s wise to have one drafted
Life has a way of throwing us all curveballs. An accident or mental decline due to aging or illness are common causes. A POA can also be critical if family members rely on the incapacitated principal, financially or otherwise. Without this document, the courts decide who’ll take over, and the incapacitated principal will have no say in the matter. In other words, drafting a POA is about putting someone you trust, regardless of whether they are a family member, in control of your affairs to make decisions consistent with your wishes.
Types of Powers of Attorney
New York law has different types of POAs, each with different parameters:
- General Power of Attorney: It grants broad powers to your agent over your financial and business matters.
- Limited Power of Attorney: This type of power grants specific or limited powers to the agent for certain transactions or time periods.
- Durable Power of Attorney: Generally goes into effect immediately and remains in effect after the principal becomes mentally incapacitated.
- Health Care Proxy: This is a specific type of POA that allows your agent to make medical decisions on your behalf, such as life support or operations.
It is best to plan ahead
POAs are like other legal agreements—they are valid when they follow New York law. Working with an experienced estate planning attorney can help ensure that the job is done right before it is too late. Not only will the document be legally sound and notarized, but the lawyer can guide the principal through the process, addressing all needs and concerns. They can explain the roles of the different agents and provide guidance on who would be the right fit, family member or otherwise, to fill the role.