Having a power of attorney allows someone else to make decisions for you if you can't make those decisions for yourself.
In your everyday life, only you have the power to act on your own behalf. Situations can arise, however, where it would be more beneficial for someone else to act for you. In the event of incapacity or other severe circumstances, decisions must be made regarding your finances or health; but, if you do not have the capacity or ability to make such decisions, there could be troubling ramifications for not being able to do so. To prevent headache and confusion in the event of your incapacity, it is important to create a "Power of Attorney."
A Power of Attorney is a document wherein you ("The Principal") give someone else ("The Attorney in Fact") the authority to act for you. As The Principal, you can determine when your Power of Attorney takes effect. You may wish for your Attorney in Fact to start acting immediately, or you may only wish for your Attorney in Fact to act for you should you become incapacitated or unable to act for yourself. The latter of these two options is known as a "Springing Power of Attorney," because the Power of Attorney only "springs" into effect in the event of your incapacity.
There are two main types of Powers of Attorney which are essential to any effective estate plan: (1) a Durable Health Care Power of Attorney, and (2) a Durable General Power of Attorney.
A Durable Health Care Power of Attorney allows your Attorney in Fact to make medical and healthcare decisions for you when you cannot make those decisions for yourself. Your Attorney in Fact will be allowed to hire and fire medical professionals, gain access to your medical records, and enforce any Health Care Directive that you may create. If you are an organ donor, your Durable Health Care Power of Attorney may also include a provision expressly stating that as your desire.
In contrast, a Durable General Power of Attorney allows your Attorney in Fact to make financial and other personal decisions for you. Your Attorney in Fact may be allowed to open bank accounts in your name, pay your taxes, or make loan payments. Your Attorney in Fact may also be able to choose a different place of residence for you and even pay for the costs of your pets.
By working with Vince Taormina, an estate planning attorney with The Taormina Firm, to draft a Power of Attorney, you will have the ability to customize the authority to wish to grant your Attorney in Fact, and determine when you wish for your Power of Attorney to take effect.
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