Many people are left with questions about a Power of Attorney and what it means in terms of legal action and control. Here we look at what a Power of Attorney is and explore some of the erroneous concepts that people have. There are a number of issues, or rather misconceptions, with a Power of Attorney:
Fiction: Even if a person is deemed legally incompetent, they can still sign for a power of Attorney.
Truth: A person has to be legally competent if he or she is going to sign for Power of Attorney. What does this mean? The definition of a person who is legally competent is one who can serve as an executor or an administrator. Medical records and other documents are presented to a judge to determine if a person is legally competent enough to sign a power of attorney.
Fiction: If a principal passes away, a Power of Attorney can remain in effect.
Truth: When the principal passes away, durable Power of Attorney also ends. Thus, any legal authority that the Power of Attorney grants to a selected agent ends the minute the principal dies. A Durable Power of Attorney can outlive a person’s mental incapacity, and herein lays the difference between a Durable Power of Attorney and a Power of Attorney: The difference is centered on the issue of incapacity of the principal.
A standard Power of Attorney will end when the person dies or becomes incapacitated: This means the person chosen as the Power of Attorney can engage in business and make decisions for the principal until the individual is mentally incapacitated or dies. The basic Power of Attorney might prove ideal if the principal is indisposed or outside of the country.
Fiction: There is only one standard Power of Attorney.
Truth: There are different kinds of Power of Attorney. The type in use is selected by the principal who decides what powers are being granted to a selected agent. This information is put into the Power of Attorney document, and it is paperwork best left to a qualified legal professional to ensure the document’s integrity. There are two chief kinds of Power of Attorney:
- General POA: Governs all of the POA powers including the acts of buying/selling the principal’s assets, but the POA documents defines one’s specific powers as an agent.
- Limited Special POA: Only refers to some, not all powers are clearly specified in the POA. It might, for example, allow for the sale of a single property, and not the management of all property.
Fiction: A person with Power of Attorney can do whatever he or she desires with the principal’s estate.
Truth: Due to things like fiduciary obligation, also known as overriding obligation, working with the Power of Attorney, the decision one makes must be what is considered in the best interest of the principal