Power of Attorney Form

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A power of attorney form or "poa" is a legal contract that is used to give another party "the agent" authorization to act on behalf of someone in affairs relating to legal matters. These legal matters may include financial, medical, and guardianship issues on behalf of the individual creating the power of attorney. Additionally, a durable power of attorney means that the agent can continue to act even if the individual can no longer make decisions. A POA is required to be signed according to state laws to be in legal effect.

Popular Types of POA Forms

Durable Power of Attorney

  • A durable power of attorney is a legal document that uses the same terms as a general power of attorney. The person who is giving the power is the principal. The person who will hold the power will either be referred to as either the agent or as the attorney-in-fact. It still gives power to the agent to act on behalf of the principal. 

  • The difference between a durable power of attorney and other forms is that if the principal becomes disabled or incapacitated in some way, the agent would still hold power--it doesn’t end. However, if you want your agent to continue to have power if you become disabled or incapacitated, make sure that your power of attorney explicitly states that it is durable. That one word makes all the difference.

General (Financial) Power of Attorney

  • With a general power of attorney, one person (known as the principal) permits another person (usually referred to as the agent or attorney in fact) to manage their assets and financial affairs while the principal is still alive. The agent can be given the legal right to do anything that the principal can do. So, the agent could pay bills, control a checking or savings account, sell real estate, make decisions related to stocks or retirement accounts, and more.

  • Because this legal document grants the agent substantial power, the principal needs to list out clear instructions about what the agent can and cannot do. For a general power of attorney to be activated, the principal should have the legal capacity to enter into this agreement. This means that the principal must be over the age of 18 and be able to understand what it is that they’re doing by entering into this agreement.

  • With a general power of attorney, a clause can be added to end the power of attorney within a certain time frame. Additionally, if a problem arises, the principal can revoke the power of attorney at any time (as long as they still have the legal capacity to make that decision). The power of attorney would end in the event of the principal’s death or when the principal becomes incapacitated.

IRS Limited Power of Attorney (Form 2848)

  • This form should be used when you require an individual to represent before the IRS. If you have ongoing legal proceedings with the IRS, it is best to utilize Form 2848 to allow an experienced tax attorney and/or accountant to present and negotiate the case on your behalf with the IRS.

Limited Power of Attorney

  • A limited power of attorney involves the principal granting specific powers to the agent. These powers are explicitly mentioned in the limited power of attorney. Therefore, while the agent may be permitted to access a checking account to pay the monthly expenses of the principal, they may not have permission to make decisions related to medical care or retirement accounts. 

  • Both a limited and special power of attorney is limited to handle certain affairs on behalf of the principal because the principal is unavailable or unable to do it for some reason. A common reason someone would use this type of POA is if the person were leaving the United States for a specific time and intends on returning. If the principal becomes incapacitated or dies, a limited power of attorney will cease to be valid.

Medical or Healthcare Power of Attorney

  • A medical power of attorney is more commonly referred to as a health care power of attorney (HCPOA). It uses the same terms of principal and either agent or attorney-in-fact. You’ve probably noticed that under the other POAs we’ve discussed that those typically end (except for a durable power of attorney) if someone becomes incapacitated.

  • With a medical power of attorney, you’re creating a legal document that gives someone permission to make medical decisions on your behalf if you’re unable to do so. It’s important to note that you don’t have to be terminally ill, involved in a high-risk occupation or activity, or elderly to use this document. Your agent will have the ability to consent, refuse, or withdraw medical treatment, services, or procedures on your behalf.

Special Power of Attorney

  • A special power of attorney is another name for a limited power of attorney. With this type of power of attorney, the principal is giving the agent or attorney-in-fact the power to make decisions on their behalf, however, it is done so under certain circumstances. These circumstances must be clearly explained in the power of attorney.

  • The principal can also specify the power that the agent has. For instance, the agent may have permission to access the bank account of the principal to pay his or her expenses, but the agent may not be given the power to sell real estate or possessions of the principal. If the principal becomes incapacitated or dies, a special power of attorney will no longer be valid.

What is a Power of Attorney?

The person authorized to make decisions is known as the agent or the attorney-in-fact. The party who is authorizing the agent or attorney-in-fact is referred to as the principal, donor, or grantor.

The power of attorney form allows the agent or attorney to make financial decisions, gifts of money, health care decisions, or even guardianship decisions. The person who is representing the grantor may be entitled to receive payment for their services as an agent. However, the agent may also be a family member, such as a spouse, adult child, family friend, or another relative.

A power of attorney form serves as a legal definition of the powers granted by the agent. This can either serve as the authority to deal with a specific issue, such as critical care treatment, or the power to handle all of the principal’s affairs. The former is called a “specific power of attorney” and the latter is called a “general power of attorney.” 

5 Easy Steps to Create a Power of Attorney

When you make your power of attorney, it must comply with the laws in your state. Follow these 5 steps to create your power of attorney.

Step One: Think about Your Needs So You Choose the Right Document

First, review the different types of power of attorney documents available. Some are revocable and some aren’t. Also, think about your actual needs. Do you need someone to make medical decisions? Do you need someone to handle your personal affairs, such as paying your monthly expenses? Do you want or need someone to buy or sell a property or make business decisions? You can even list out exactly what your agent can and cannot do.

Step Two: Choose Your Agent

Depending on the state you live in, your agent may be referred to as an attorney-in-fact. This person will receive legal authority to make decisions on your behalf as outlined within the POA. Make sure that you choose someone trustworthy and responsible. This needs to be someone you know will make decisions in your best interest and who won’t abuse their power.

You may also list a secondary agent. This person will assume the position if your first agent cannot or will not take on the responsibility.

Step 3: Fill Out the Document

Now that you have your needs in mind and you’ve chosen at least one person who will act as your agent when the time comes, it’s time to complete the document. This is quite easy to do, but you must use one that is written to comply with the rules in your state.

Then, edit the document by filling in the blanks. You’ll need to use your personal information as well as the personal information of your agent. Within the document, you will likely be referred to as the Principal.

Step 4: Signing the Document

Properly signing the document is how it becomes a legally binding instrument. Depending on the state you live in, you may need to sign it in front of two witnesses and a notary. It’s also likely that your witnesses cannot be named as your agent. Keep the original and also make copies. Many institutions will not accept a photocopied version.

Step 5: Keep the Document in a Safe Place

Since some organizations and institutions will not accept a photocopy, make sure that you keep the original document in a safe place. Make sure that your agent knows where the original may be found.

Power of Attorney FAQs

What’s the Difference Between a General Power of Attorney and a Durable Power of Attorney?

With a general power of attorney, the powers granted to the agent end if you become incapacitated or if you die. A durable power of attorney is a document that allows the agent to retain their power even if you are incapacitated. A durable power of attorney can be extremely valuable if your agent can make medical decisions on your behalf or if that same person is named as your agent in a living will.

What Is the Procedure for Signing a Power of Attorney?

The procedure and requirements for signing a power of attorney vary slightly in every state. Generally, your named agent must be at least 18 years old. Your agent may not act as a witness during the signing process. In most states, there’s a requirement for the signature of the Principal (you) to be witnessed. The most common witness requirement is two witnesses. Some states require that the document be signed in front of a notary.

Why Should You Use a Power of Attorney?

With a simple power of attorney, you can elect someone that you know (and trust) to make financial, personal, and medical decisions on your behalf. You can choose to make your power of attorney durable so that it will remain active if you become unable to make your own decisions.

How to Deal with Potential Consequences Ahead of Time?

There are many elements you should consider when it comes to drafting your power of attorney, and you must think about those things because it helps you minimize complications later in your life, especially if something unfortunate were to happen to you. We’ve highlighted:

  • The importance of ensuring that you thoroughly understand the power of attorney

  • What your agent has permission to do

  • When they can do it

  • The period they can perform their duties

  • Whether the document is durable

  • Your wishes as they relate to your medical care

  • The importance of choosing an agent or attorney-in-fact who will keep your best interest at the top of their mind

Something else you must do is to reassess your power of attorney regularly. People get married. They get divorced. They change their names. They change their minds. They move away. There are lots of things that can happen that could cause a complication in the future when the power of attorney is needed. 

For instance, if you name your adult child as your agent and you use their first and last name, although they go by their middle name, they may not be able to act as your representative and access your accounts if their identification lists their middle name as their main name. Make sure that you word your power of attorney in a way that will help your agent take action on your behalf.

What is the Importance of a POA for Personal and Business Reasons?

There are several reasons why it may be beneficial for a caregiver to have the legal authority to handle the financial, personal, and business affairs of an elderly loved one. Certain physical ailments can make it difficult to go to the bank, write out checks, or even see a computer screen to pay bills online. Hearing loss can also make it difficult to pay bills over the phone.

Common powers are given to an agent include:

  • Financial power --The ability to make decisions involving money

  • Give money as a gift

  • Buy and sell real estate or vehicles

  • Pay monthly expenses

What is the Importance of a Medical POA?

With a medical power of attorney, you’ll have the ability to make medical decisions and set appointments on behalf of your loved one. A medical power of attorney is helpful even if your loved one is in the beginning stages of a debilitating physical or mental illness. 

Keep in mind, though, that a medical power of attorney must be entered into while the principal is in the proper state of mind. They must be able to understand what they’re signing and how it affects them.

If you are considering naming an agent to make medical decisions for you, make sure that it is someone you implicitly trust. This person will have the power to make treatment decisions on your behalf, including end-of-life decisions. You should also consider completing an advanced healthcare directive to express your wishes to your medical care team.

How to Use a POA as a Caregiver?

If you’re a caregiver for an elderly parent or other loved one, you should understand how a power of attorney works. You should also understand that if your elderly loved one asks you to get involved in a power of attorney, there are some things that you need to know:

  • Your loved one needs to have the mental capacity to understand the power that they’re giving you.

  • Your loved one may need more than one type of power of attorney.

  • If your loved one wants you to have the ability to continue to take care of their affairs if they are physically or mentally unable to make those decisions, you need to discuss the importance of using a durable power of attorney.

  • Understand that regardless of which power of attorney you have (or even if you have one for personal and business affairs and one for medical decisions) that those will expire when the principal dies. You will not necessarily be the one in charge of their estate (unless they’ve named you as the administrator in their will or other estate documents).

What is the role of a POA in Immigration?

In the case of a parent worried about deportation, a power of attorney can be drawn up to give a trusted friend or family member the legal authority to make school, medical, and other important decisions on behalf of their children.

Some parents worry that signing a power of attorney giving someone else the ability to make decisions for their children will strip them of their rights as a parent. Keep in mind that the power of attorneys can be written with a trigger that puts the authority into motion. Yet, because a power of attorney is a legal document, parents should understand what they’re signing and should seek out qualified legal advice to make the best decision for their family.

One of the highlights of choosing a power of attorney over legal guardianship is that parents signing a power of attorney do not have to appear in court.

What is the role of an advanced directive?

It’s also important for you to consider an advanced directive or living will.

The purpose of an advanced directive or living will is to explain to your family and medical team what your wishes are, related to your care. This is important because you need your family (or closest friends) and your doctor to carry out your wishes related to medical treatment when treatment should be halted, your end-of-life decisions (such as a Do Not Resuscitate or to withhold food and liquid), and anything else that you want people to know regarding how you’d like your medical needs and wishes met. This helps clarify to your agent and your medical team what you want and how they can proceed to honor your wishes.  

Another important reason to separate your financial/personal power of attorney from your medical power of attorney is that the person you name to make your financial and personal decisions may not be the best person to make your medical decisions. They may not feel comfortable doing it, or they may not feel like it is their place to make those decisions. Therefore, when you separate these issues into two power of attorney forms, you can name two separate agents to carry out their respective duties.

What is a Durability Provision?

If you become somehow mentally incompetent, due to old age, sickness, accident, or other cause, and you want a general power of attorney form to go into effect, you should need to sign a durability provision. This provision essentially puts your POA into effect on your behalf should you be unable to make that decision. Be sure the durability provision dictates that you must be pronounced mentally incompetent by a medical professional, and not just a friend or family member.

How do you enter into a POA?

Now that you understand the basic differences between the power of attorney documents, you need to understand the basics of entering into one. First, of course, you need to choose one that best fits your needs. Remember, if you want or need someone to remain able to make specific decisions for you if you become disabled or incapable of making your own decisions, you need to make sure that your power of attorney specifies that it is durable. 

After you’ve chosen the right type of POA for your needs, think about the powers that you want or need your agent to have. Make sure that you explain it very, very clearly. This helps protect you and ensures that your agent understands what you need from them. Your power of attorney should meet any criteria laid out by the state. POAs are state-specific. 

Who should be chosen as an agent or attorney-in-fact?

While there’s not necessarily a right or wrong way to choose an agent, there are certain individuals the principal may want to consider first. A spouse, an adult child, an adult niece or nephew, an adult sibling, or a trusted friend can act as an agent. The important part, as stated in the last section, is to make sure that the person you've chosen truly has only the best interest of the principal in mind.

What responsibilities does the agent have in upholding the tenets of a general POA?

To ensure the agent adheres to the agreement, he or she must keep complete records of all actions and transactions made on the principal’s behalf. He or she must also verify, at the start of the agreement, that he or she fully understands all the terms outlined and both the extent and the limits of his or her responsibilities.

A durable power of attorney form may assign the agent any number of responsibilities. Common responsibilities include:

  • Management of principal’s financial assets

  • Making critical health care decisions, including the decision to begin, continue or cease medical procedures

  • The making of financial or other types of gifts or donations

  • Guardian election

Does an agent receive compensation?

Agents are sometimes paid. Because of this, the principal and the agent should agree on an amount in advance. If the principal doesn’t pay as agreed, the court can determine how much should be paid. 

When it comes to choosing an agent, the power of attorney should include some specific language that obligates the agent to keep accurate records related to the powers granted to them as well as how those powers are exercised. The power of attorney should also include a limit on gift-giving by the agent. You should have one primary agent and one or two backups listed on your POA, just in case something tragic happens to Agent number one. 

What makes a POA Legal?

Instruct your agent to keep a record of all actions

  • To ensure no wrong has been done on your behalf while your POA is in effect, make it a provision of the POA that the agent(s) must keep a complete record of all transactions and decisions conducted under your name.

Be sure to certify your POA

  • This means distributing several copies, all signed by you and a notary public. A POA cannot go into effect if it is not certified.

A Sample Power of Attorney with Examples for Each Step

Step 1 - Sign and Date  

After reading and understanding the aforementioned clauses, sign and date the agreement, certifying that you are granting permission to your Agent to handle financial and legal affairs on your behalf should you become unable or incapacitated?

Step 2 - Provide your Contact Information

Provide your name, and the name and contact information of your Agent. This should include your Agent’s full name, address, and county where he or she lives. Keep in mind that your Agent must be at least 18 years of age and be of sound mind.

Step 3 - Witness Information

After indicating the powers given to your Agent, provide your Witnesses. Most states require that your Durable Power of Attorney document be notarized and witnessed by two attesting individuals. Be sure that the following information is provided for each witness:

  • Full Name

  • Full Address (including city, state and zip code)

  • Telephone Number

  • Signature

Download a PDF or Word Template

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