The question is, “What is a power of attorney?” A power of attorney is typically a written document by which an individual, who is described as the principal, has the ability to delegate tasks to another person, who is generally called the agent. The document is typically in writing and the document is intended to specify the extent and scope of the agent’s duties and responsibilities. An agent, of course, is the fiduciary and owes the utmost duty of honesty, integrity and care on behalf of the principal, but there are different types of powers of attorney that one would want to know about if one was going to have some prepared.
When I say different types, there’s financial and there’s medical, which I’ll talk about later. The key here is oftentimes, the purpose of the power of attorney is to allow someone to act for you when you are unable to. That might be as a result of a stroke, it might incapacity of one form or another, so in order to have that power of attorney be effective, it needs to be what we refer to as a durable power of attorney. Durable means that it endures or continues to be valid after one has lost capacity. If it’s not durable, then upon incapacity, the authority of your agent to act on your behalf expires, so it’s important, number one, that it be durable.
Another primary aspect of powers of attorney is whether it’s immediate. In other words, as soon as you sign it, does the power vest in the agent so that person can act for you immediately? Or does it spring into existence at some future date such as your incapacity?
Powers of attorney are very important. They’re critical to a valid and complete estate plan and something that everyone should have, regardless of their situation.
