WHAT IS A 

"POWER OF ATTORNEY"? 

 A power of attorney is a legal document that gives a designated individual the ability to act on the behalf of the "principal."  The principal is the person that creates the power of attorney.  An "attorney-in-fact" or "agent" is the person who receives the power of attorney.  An attorney-in-fact does not have to be a lawyer and is usually a family member or close friend.

A person signing a power of attorney must be competent at the time of signing.  A power of attorney is effective on the date that it is signed unless otherwise stated within the document.  One option is to withhold power until it is needed and  have the document require the principal be incapacitated before the document will have legal authority.

The authority of the attorney-in-fact can be very specific and only allow a limited range of actions to be performed such as bank transactions or the selling of property.  However, a general power of attorney is often more broad in its scope and allows for the attorney-in-fact to make any financial decisions to be made on behalf of the principal.

A power of attorney ends at the time of death.  A power of attorney also ends when the principal becomes incapacitated, unless it is a durable power of attorney that allows the attorney-in-fact to make decisions and act for the principal even after incapacitation.  This can avoid the need for a court appointed guardian and can avoid costly court fees and time lost during the process of appointing a guardian.

When considering whether a power of attorney is beneficial and should be considered, the principal should always consult with an attorney that has experience in such matters.