What is a Power of Attorney?

Virtually everyone has heard of the term power of attorney or POA before. Even so, a lot of individuals don’t fully understand what the term means. Usually, understanding of POA comes into focus after a family member needs additional help due to what could be a variety of personal limitations. Power of attorney is written permission that allows one individual to help another who can no longer take care of crucial issues of life on their own.

In understanding the relationship that results from a power of attorney there is a name given to both the person receiving help and the one giving it. The person receiving the assistance is known as the “principal” while the person providing the help is known as the “attorney-in-fact” or “agent.”

There are a number of circumstances that can necessitate a power of attorney. Typically, these are mental or physical limitations that get in the way of an individual being able to act in their best interest. This may simply be due to an individual who is aging and who cannot care for themselves as they once did. In other cases, a mental difficulty like dementia becomes the reason for a POA even though the physical body is functioning properly.

Here are some of the aspects of a person’s life that a power of attorney can help out with.

  • Private concerns
  • Legal matters
  • Business issues
  • Health Care Decisions
  • Other needs as they arise

An agent sometimes has to make difficult decisions for the principal. At times, those decisions are not what is desired by the individual being served. However, the goal of an agent should always be to consider what is best for the principal.

As long as the principal is not mentally unable, they still get to make decisions as to who would be the best agent for their situation. It’s important to designate someone who can be fully trusted. Also, if you are about to come up with a power-of-attorney document, it is wise to sit down with a lawyer and discuss the situation. This will help both parties decide what is the appropriate level of authority to give to the agent given your specific situation among other vital details.

Typically, the agent is paid a given amount for the services that they provide. This goes to show the importance of this job and that it is a big responsibility. The agent is dealing with the most personal issues of the principal’s life.

There are two types of power of attorney. One is considered “limited” and the other is called “general”. With a limited power of attorney, only certain aspects of a person’s life are looked after. With a general power of attorney, all major key decisions and areas of life require assistance.

Although the idea of a power of attorney can initially be a bit scary, this shouldn’t be the case. Having a relative or friend that truly cares about you can make it a relief. It frees you up so you don’t have to worry about certain aspects of your life. On the other hand, if you are an agent for someone else, it can be a rewarding experience. You get to help someone with important and intimate details of their lives. It is a very meaningful way to make a positive difference in the world.

Categories: Financial and Legal.

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