FROM MIKE’S DESK
What Is a Power of Attorney, and Do I Really Need One?
If you find yourself asking this question, the answer is plain and simple: yes, you do. Let’s take a look at key questions surrounding a Power of Attorney (POA) and why this legal document is an important financial consideration.
What is a Power of Attorney?
A Power of Attorney (POA) is a legal document that allows you to designate a person to assist you with the management of your finances and other things to a person called an Agent. Your Agent must act in good faith and in accordance with your reasonable expectations. A POA has a Principal and an Agent (or multiple Agents). For example, if you sign a POA for your daughter, Joan, to assist you and help you write checks to pay your bills, you are the “Principal” and your daughter, Joan, is the “Agent.” In a typical POA, you provide your Agent with powers to assist you with various tasks, such as completing financial transactions (writing checks), entering into contracts, or selling real estate. Pennsylvania law provides a long list of powers that you can delegate to an Agent. There are also Health Care Powers of Attorney.
What’s In a Name?
People refer to a POA by different names, including General or Financial. Some refer to a POA as General because a Principal grants the Agent many different general powers. Another common reference for a POA is Financial, because for many people, its main focus is to assist with managing financial matters. In most cases, people are referring to the same document.
Why Do I Need a Power of Attorney?
If a person becomes disabled or incapacitated without a POA, then the Court may appoint a guardian to care for the person to manage their affairs. The process can be very expensive, and the person may lose certain rights to act on his/her own behalf. It is much better for you to make your own decisions about your future, rather than place those decisions in someone else’s hands. Having a POA is a practical alternative to placing assets in joint names, because it provides you more control over how your finances and affairs will be handled.
If I Already Have a POA, Do I Need to Change It?
Over the last 15 years, several significant changes to POA law have occurred, with the most recent changes taking effect in January 2015. If you have a POA properly executed under the prior law, it remains valid. However, sometimes people and businesses relying upon POAs may be unfamiliar with older document versions, making it more difficult to use them.
Preparing a POA is a common estate planning tool to assist you in the event of possible incapacity. A POA is one part of an effective estate plan, which may also include: a Will, a Healthcare Power of Attorney, and a Living Will. It is wise to revisit Power of Attorney (POA) and your estate plan periodically to ensure the documents still meet your needs and remain effective when you need to use them.
Need to Arrange or Modify a POA?
Whether you need to set up your POA or take another look at the one you have in place, I am available to assist you with any estate planning matters you may have. Please contact me to discuss your needs.
Michael Frisbie
Frisbie Legal Solutions
169 N. Broad Street
Doylestown, PA 18901
267-899-1776
267-899-1775 (FAX)
michael@frisbielegalsolutions.com
Frisbie Legal Solutions, PLLC, is a registered professional limited liability company in Pennsylvania. The information on this website is designed for general informational purposes only. Frisbie Legal Solutions provides legal services and advice to clients only after an attorney-client relationship has been formed through a written agreement. The information presented should not be construed to be formal legal advice nor the formation of an attorney-client relationship. Any communications sent through this website are not privileged and confidential.