What Is The Best Power Of Attorney To Have?

Types of POAs

A power of attorney (POA) is a powerful legal document granting tremendous authority to another person to access your bank and other financial accounts and make decisions for you. In estate planning, power of attorney is a crucial document to consider.

Using power of attorney, you assign a person—called the agent—to represent you—referred to as the principal. Before signing any legal documents, you should become familiar with the different types of POAs and how they can serve you.

The Roles and Types of Powers of Attorney

In general, POAs give an agent legal authority when the principle is incapable. Various powers of attorney specify the capabilities and reach of the agent’s decision-making authority.

1) General Power of Attorney

With a general power of attorney, you can assign an individual to handle all of your business, including your financial accounts. This individual (agent) has the authority to conduct business, sign documents, and pay bills on behalf of the principal.

This type of POA you may wish to use if you need the agent’s services for only a brief period. It grants the agent considerable power over your life, so you may want to set limits initially.

2) Durable Power of Attorney

Durable powers of attorney typically take effect immediately after being signed. This means the agent has the authority to carry out your instructions should you become incapable. However, the power of attorney in question expires when the principle dies.

3) Non-Durable Power of Attorney

Similar to a durable POA, this legal document takes effect immediately upon signing. However, the agent loses their authority to make decisions once the principle becomes incapable, incompetent, or dies.

4) Limited Power of Attorney

A special power of attorney, commonly referred to as a limited POA, is frequently created for the sake of convenience. These kinds of POA usually have a narrower scope and are revocable at any moment by the principal. In Ohio, limited powers of attorney are typically signed to accomplish a specific business deal or real estate acquisition.

5) Conditional Power of Attorney

Conditional POAs (also called “springing POAs”) only go into effect when a specific condition is met, such as the principal becomes incompetent or otherwise incapable of managing their affairs. Therefore, it’s crucial to ensure clear guidelines for the conditions under which this type of POA takes effect.

Primary Purposes For Creating Powers of Attorney

Typically, POAs are used to make financial or medical decisions. In Ohio, financial power of attorney should work in the principal’s best interests. Depending on how the POA is set up, the scope of authority may or may not be precisely laid out. That said, the agent is usually not allowed to modify trusts and beneficiary designations unless they have been given explicit special permission.

The agent may make medical choices on behalf of the principal with the aid of a medical or health care power of attorney. Medical POAs often begin at the time of incapacitation and are conditional. Although these agents have the authority to make healthcare choices on behalf of the principal, they are not permitted to deviate from a living will. In Ohio, an agent in a health care POA is referred to as an attorney-in-fact.

Frequently Asked Questions About POAs

Because a power of attorney can bestow significant power to an individual over the life of the principle, it’s essential to have as complete an understanding as possible. Here are some questions that come up often.

Who can override a power of attorney?

The principal may decide to rescind any powers of attorney granted to an agent if they are of sound mind and body. While they can still make their own decisions, the principle can cancel a power of attorney at any time.

However, once the principal can no longer make knowledgeable, informed choices on their own behalf, specific steps must be taken to override an existing power of attorney and appoint a new agent to carry out the necessary duties. This will require someone like a court-appointed guardian or other interested parties, such as a family member or very close friend, to petition the court to end the current POA.

A qualified estate attorney should be able to help with this process.

Can two siblings have power of attorney?

Siblings can share power of attorney, as can any other party of two or more. It’s essential, however, to ensure the power of attorney documents are written clearly and reviewed by a competent attorney.

What are some disadvantages to power of attorney?

While power of attorney can help ensure the principle’s affairs are taken care of, it doesn’t entirely cover everything. Because power of attorney ends at the principle’s death, the POA has no control over what happens to the principle’s assets after death.

There can also sometimes be a concern that a POA bestows too much power and can make the principle vulnerable to abuse. While this is very rare, it’s still crucial to be sure you’ve picked the right person to act as the agent.

For Sound Legal Advice

If you’re considering creating a POA and assigning an agent to manage your financial transactions or medical care decisions, you want to be confident the POA will serve your needs and those of your loved ones.

The experienced legal team at Heban, Murphree & Lewandowski, LLC wants to help you understand what can sometimes be a complicated and challenging process. Schedule a free consultation to learn more about estate planning and other essential legal services.