A Power of Attorney is a document that gives one person (the attorney-in-fact) the legal authority to act on behalf of another person (the principal) and make decisions when the principal is unable to do so in areas such as real estate, business, finance, and more.
A principal can allow their attorney-in-fact to make any of their decisions (using a General Power of Attorney) or some of their decisions (using a Specific Power of Attorney).
An attorney-in-fact can be given the power to make financial decisions in your stead, like making payments or closing accounts for you.
For example, if you were diagnosed with an illness that required long-term hospitalization, you could allow your attorney-in-fact to cancel unneeded bills like your cable and internet.
Your attorney-in-fact can hold other financial powers including the ability to control your bank account, cash checks, or transfer funds.
A Power of Attorney lets your attorney-in-fact handle your legal matters. This means they can commence lawsuits, communicate with your lawyer, file documents with the court, and more.
For example, if you were in the middle of a divorce but needed to go away for business, you could grant your attorney-in-fact the power to handle your divorce, including signing your paperwork.
You can restrict your attorney-in-fact’s powers and may want to restrict your attorney-in-fact’s ability to start lawsuits on your behalf.
Your attorney-in-fact can handle all of your real estate responsibilities. This includes selling, renting, trading, or managing any personal, residential, and commercial properties owned or rented in your name.
For example, if you’re renting out your house, you may want your attorney-in-fact to manage your tenants, including signing the lease agreement and issuing notices to enter.
Your attorney-in-fact can manage your business, including making employment, budgetary, and investment decisions on your behalf. They can also be your proxy in meetings and vote as a shareholder in your stead.
For instance, if you own a small business but need to travel to another country for an extended period of time, you may want your attorney-in-fact to run your business and manage your employees, including making decisions regarding hiring and firing.
A Power of Attorney can give your attorney-in-fact other powers, such as:
- Maintaining the family (e.g. paying for your children’s tuition or medical expenses)
- Hiring professionals (e.g. hiring a repairman)
- Handling government tax requirements and benefits (e.g. filing and paying your personal or corporate taxes)
- Selling, purchasing, or exchanging goods (e.g. selling your furniture or buying new furniture)
- Donating to charities
- Gifting money or items to family and friends
- Making insurance-related transactions (e.g. canceling your home or apartment insurance)
- Managing assets in a Living Trust, an estate planning tool that allows you to transfer assets without going through probate
- Changing retirement plans and accepting benefits (e.g. using your pension to pay bills like your mortgage)
You can set restrictions that prevent your attorney-in-fact from acting in certain areas by using a Specific Power of Attorney instead of a General Power of Attorney. Doing so limits what your attorney-in-fact can do in your stead.
For example, you may give your attorney-in-fact the authority to manage your finances but limit them to simply cashing checks and making payments.
Original Blog Source: https://www.lawdepot.com/
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