Monday, February 18, 2013

Benefits of Creating Power of Attorney Documents

Individuals are often unclear about how to use power of attorney documents and the benefits they provide. While there are different kinds of forms with varying uses, they all provide privileges to another person to perform actions for your benefit.

Power of attorney documents can be used for personal or business reasons. Common uses include authorizing agents to conduct banking transactions, transfer ownership of titled property, and to become involved in medical decisions.

People are not allowed to perform tasks that involve another person's property or possessions unless written permission is provided. The only way individuals can carry out financial transactions or sign documents for someone else is by way of POA forms.

The kind of form used is based on the type of duties involved. Some documents provide sweeping powers which extend for life. Others grant limited powers for specific tasks and powers are terminated once duties are completed.

General power of attorney gives agents broad powers which enable them to carry out multiple jobs. They are often used by business owners as part of succession planning and to authorize colleagues to take over in the owner's absence or to manage financial or investment transactions.

Another use is authorizing a business or individual to act as their representative in negotiations. As an example, people can hire a tax accountant to negotiate deals with the Internal Revenue Service or creditors. Or, a private investor could permit realtors to buy or sell investment properties or work as their property manager.

In most instances it is unnecessary to file power of attorney documents with local courts. However, if forms are affiliated with real estate dealings then chances are they will need to be recorded. Also, a new POA form has to be filed if privileges are terminated at a later time.

Special power of attorney is commonly used whenever agents need to perform a limited number of transactions. Agent privileges are instantly terminated once the tasks are completed.

Responsibilities can include a range of tasks that can be as simple as reconciling bank accounts to complex jobs like selling a house. Generally speaking if a deal or contract requires a legal signature than it's advisable to create a power of attorney to let another person take care of it if you cannot. 

Medical power of attorney forms are an essential part of estate planning. These forms let people retain control of medical choices even if they are unable to communicate. Also known as a healthcare proxy this form permits agents to participate in health related matters when a person is incapacitated.

Healthcare proxies provide written directives pertaining to medical procedures you agree to or oppose. They are often included as part of trust funds and other types of estate planning strategies. It is important to talk about choices with your healthcare representative so they can make important decisions that align with yours.  

Most people find it beneficial to discuss their situation with an estate lawyer and decide the most appropriate power of attorney. Getting professional advice will ensure you have satisfactory protection in case the unimaginable takes place.

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