5 Myths about Powers of Attorney

A Powers of Attorney (POA) is a legal document known to someone else as your agent for making financial and business decisions on your behalf. A POA can be useful in case of illness or disability or if you simply are not available to handle certain transactions. Because of the authority the document gives, it is important to know the myths about the powers of attorney so that you understand how they work.

Myth 1: Your Powers Of Attorney Is Effective After You Die

Powers of Attorney is effective only during your life. When you die, it dies with you and cannot be exercised after you pass away. The type of Powers of Attorney you execute determines its effectiveness during your lifetime. The general and durable powers are effective immediately and without limitations, which gives your agent the right to act for you and in the future. A special Powers of Attorney only lists very specific cases that you authorize your agent to handle on your behalf. A springing powers of attorney becomes effective only in the situation you specify, such as your being inconsistent, or for a fixed date range.

Myth 2: Your Powers Of Attorney Authorizes Medical Decisions

A Powers of Attorney is a document authorizing your agent to make only financial and business decisions on your behalf, not a medical decision. Some states have a Medical Powers of Attorney, sometimes called a Healthcare Proxy or Living Will, which authorizes a person to make medical decisions on your behalf if you are unable to decide for yourself. You need to execute this separate document if you want to give someone the right to make medical decisions for you.

Powers Of Attorney

Myth 3: Your Powers Of Attorney Can Be Used To Change Your Estate Plan

Although a Powers of Attorney authorizes someone else to make financial and business decisions for you, only you can write a will or make changes to a will. Depending on the Powers of Attorney you hold and the powers it gives to your agent, the agent may have the authority to make changes to the trust you have created, if you will have the authority to make changes to the trust yourself.

Myth 4: A Power of Lawyers Forces You to Give Up Your Freedom

A Powers of Attorney is created for your convenience. It is not a document that forces you to give up any of your freedom. The purpose of the POA is to facilitate matters for you by authorizing your agent to act on your behalf. Remember that even if you have authorized your agent to decide for you, you do not give up the decision making power for you while the Powers of Attorney is in effect. You can revoke the Powers of Attorney at any time by signing a revocation and your agent and anyone who has received a copy of the document.

Myth 5: I Do Not Need the Power to Be Young and Healthy

No matter your age or health, it is a good idea to create a Powers of Attorney so that if something goes unexpected, you have an agent who can manage your cases. If you bump into a car tomorrow, no one can pay your rent or hospital bills or submit a claim form to your insurance company until you authorize them to do so. Huh. Creating a Powers of Attorney now ensures that your agent can act on your behalf should you unexpectedly be unable to manage your own affairs.

The Powers of Attorney is an important document that can provide peace of mind. You can create a POA by working with a lawyer or using an online service provider by yourself or as part of an all-in-one estate plan.

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