5 Tips for Choosing the Best Power of Attorney

What is a Power of Attorney?

A power of attorney (POA) is a legal document that designates someone to act on your behalf. The POA is a written document that allows you (the “principal”) to give someone else (your “agent”) legal authority to act on your behalf in certain matters. You must choose who will act as your agent and specify what powers you are giving to your agent (what your agent is allowed to do for you). You may select any competent adult to act as your agent. The authority that a Power of Attorney gives to your agent can be for limited circumstances like the sale of real estate or broad for general financial and health care decisions on your behalf.

An agent designated under a financial power of attorney is authorized to handle your financial or business matters, such as paying bills, making deposits, etc. An agent designated under a healthcare power of attorney is authorized to make medical decisions in certain circumstances such as the authorization of medical or surgical procedures, admission to a medical facility, etc. You can name one person to serve as agent under your financial and healthcare POA or choose one person to be your financial POA and a different person to be your healthcare POA.

You also have the option of naming two or more people as co-agents or successor co-agents. Co-agents are supposed to work together in the principal's best interest which sometimes causes conflict. A successor agent can step in if the primary agent is unable or unwilling to serve.

In Pennsylvania, there are three main types of financial POAs:

1.   Durable Power of Attorney refers to a POA that remains in effect until the principal's death or until the POA is revoked. It does not need to be renewed. In PA, a POA is durable unless it specifically states otherwise.  
 

2.   Limited Power of Attorney or Simple POA is effective for a short time based on the conditions of the POA document. For example, you may authorize a Limited Power of Attorney to manage your finances while you are out of the country.  
 

3.   Springing Power of Attorney only becomes effective when a specific event occurs. For example, a springing POA may be triggered if the principal becomes physically incapacitated.

If you do not designate a POA and something happens to you, the court upon petition may appoint someone to handle your medical and/or financial decisions. However, that process can take weeks to accomplish and may prove expensive. Therefore, designating your own POA provides peace of mind that if something were to happen to you, someone would 1) know your wishes, 2) have your best interests in mind, and 3) have the authority to make financial and/or medical decisions on your behalf.

How do You Choose the Best Power of Attorney?

Being an agent under a POA carries much responsibility. It can be stressful, time-consuming, and emotionally draining. The best agent may not be the person who is closest to you.

When considering the best person or persons to be your financial and/or medical POA agent, consider the following characteristics:

·      Understands and is willing to take on the responsibility of an agent

·      Lives close to you

·      You trust them to follow your wishes and act in your best interest

·      Assertive when needed

·      Good communicator - even under pressure

·      Organized and detail-oriented

·      Has some understanding of finances and/or medical processes

·      Ability to collaborate with attorneys, doctors, accountants, etc.

Before naming an agent, have a conversation with the person or persons you are considering to discuss the duties and responsibilities and the scope of your legal and financial affairs. You need to thoroughly trust the agent you designate.

Ready to Set Up a Power of Attorney?

The estate planning attorneys at Bingaman Hess can help provide peace of mind by drafting a Power of Attorney to ensure that your financial and medical wishes are followed if something happens to you. Don't wait. Give us a call today at 610.374.8377.