When you set up your to do list, chances are that you will rarely plan for the aftermath of unfortunate events such as injury and death. However, anything can happen anytime, so you need to plan for the unexpected so that you avoid any anguish on the part of the family or friends.
Good news is that more people are using POAs to make decisions for them.
What is the Power of Attorney (POA)?
This is a legally binding document that allows someone else to administer your estate, or act legally on your behalf. The POA allows the agent to handle specific legal actions that you specify on your behalf.
The actions can be specific or broad, which is prudent that you choose someone that you trust without any reservation. This can be a close friend, family member, a bank or an advisor.
Misconceptions about POA
The POA is a legally binding agreement that allows someone to handle some decisions on your behalf. The POA is usually ideal when you are not in a position to make a decision, for instance, when you are sick or out of the country.
However, many of us don’t put this in mind when making our plans – we put off the need for a POA until it is absolutely necessary, which might be too late. This is attributed to certain misconceptions that arise. Let us look at these misconceptions and debunk them for your benefit.
Misconception #1: The Attorney Will Override the Guidelines in the POA
Many people fear that once they give an attorney the power to take decisions on their behalf, the attorney might end up doing what they want.
The attorney that you choose will be restricted to what you put down. The good thing is that the government has set down various checks and balances to make sure the attorney doesn’t abuse the position that you give them.
The first guidelines come from you – when creating the document, it is upon you to come up with various restrictions on the attorney. The second set of restrictions arise from the local oversight authority that puts down rules that tell the lawyer how to behave, which means they cannot work outside the regulations stated in the document.
Misconception #2: You Set the POA When You Need it
Many of us put off this task because we convince ourselves that we don’t need it at the moment.
Sadly, life doesn’t warn us when something will happen; it can be the next minute, or a few years down. Either way, you need to be fully prepared when the eventuality strikes.
Anything can happen that will make you to need the services of an attorney immediately. It is therefore wise to have the POA ready to be administered at any time. You can have a POA when you are in your late 20s and register it when you need it in your 70s, how cool is that?
Misconception #3: It Is for Life
This is a big lie. We have different POA, which can be Lasting or General. Lasting POAs are for the long term, but a general POA isn’t.
You need to take time to understand the different types of POAs, and choose the one that suits your situation. Here are the major types you need to know:
- Non-durable POA – this is for a set period, typically a specific transaction. The POA ceases when the transaction ends.
- Durable POA – this allows the representative to handle all your affairs when you aren’t able to do so. It doesn’t have a specific time period and won’t expire when you pass away.
- Special POA – this is for a special transaction. This can be a financial transaction or disposal of an asset.
- Medical POA – here, you grant the representative the authority to handle precise healthcare decisions when you are unable to do it.
- Springing POA – this comes into play in future and only when something definite occurs. This can be durable or non-durable POA depending on the triggering event.
You can see that regardless of the event, there is a POA that you can use for the situation at hand. Make sure you select the best for your needs.
Life can be funny at times – you might be fine now and find yourself in hospital the next minute. Woe unto you if you aren’t prepared for an eventuality – your loved ones will suffer. It is therefore prudent to assign someone the task of making decisions on your behalf before something happens to you.