How to Use a Power Of Attorney
A power of attorney is a document that legally authorizes one person (the attorney-in-fact, or agent) to act on behalf of another person (the principal). You can use powers of attorney to allow your day-to-day business to go forward when you cannot be present, such as closing on a vacation home in a far-off state, paying bills when you are in the hospital or taking out a loan when your spouse is serving overseas in the armed forces. Powers of attorney can be as broad or specific as you want, and there are special kinds of powers of attorney that take effect if you are incapacitated, such as a durable health care power of attorney, which instructs an agent as to your medical treatment intentions. Power-of-attorney laws vary from state to state and country to country, so check with a local attorney for specifics, but these steps should help you determine how a power of attorney can work for you.
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Instructions
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Use a general power of attorney to authorize another person to transact ordinary business when you cannot be present to do it yourself, such as signing checks or tax forms, signing to accept packages or purchasing stocks. Also use a general power of attorney to authorize your spouse to sign for you if you're away on business or military service. However, as Attorney Aaron Larson writes for ExpertLaw.com, "Given that the power of attorney can grant considerable power to a third party to act on your behalf and sign your name to legal contracts, you should give careful consideration to the person to whom you choose to grant those powers, and whether any limits should be imposed in the time the power of attorney will last, or in its scope."
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Prepare a "specific" or "limited" power of attorney to allow someone else to stand in for you at a particular event, such as at a real estate closing. State that this power of attorney is restricted to one transaction or time period to protects your assets.
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Use a power of attorney at your bank to allow someone else to access your bank account. Use a real estate power of attorney to authorize someone else to sign real estate documents for you, such as closing on a purchase or a home equity loan.
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Prepare a durable power of attorney to take effect if you are incapacitated. A general or specific power of attorney is only valid as long as the principal remains legally competent to transact business himself.
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Use a durable power of attorney to authorize someone else to make medical treatment decisions for you if you are incapacitated. Durable powers of attorney can also be issued for financial affairs.
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Tips & Warnings
Contact your state bar association for assistance in deciding which power of attorney works best in your state. Elder care organizations and legal clinics often offer free assistance with preparing a power of attorney. Your state bar association can point you to attorneys who provide free or low-cost legal services to military families who need legal documents before a family member leaves for overseas deployment.
Don't make your power of attorney too broad or open-ended, or you will be putting your assets and your peace of mind at risk.
