What is Power of Attorney Used For?

A Power of Attorney is a document in which you appoint someone else to act on your behalf on matters you specify. It can be made to start immediately or upon mental incapacity. You can choose someone that is in control of some or all of your legal matters and assets; the individual given power is the Agent or Attorney-in-Fact, and you are the Principal.
There are two general types of Powers of Attorney – medical and financial. Both types can have limited application and authority or can be drafted to be applied in a broad manner. No matter the specific level of authority being granted, creating such an instrument assigns at least some authority to another individual. Therefore, you need to take care to select a capable and trustworthy individual to be the agent.
In some situations, the Agent can be given authority to make medical decisions for you; this is known as Medical Power of Attorney. When a designated person makes medical decisions for you should you be unable to due to lack of capacity, this is called a Power of Attorney for Health Care or a Living Will.
A General Power of Attorney can be used when an individual does not have capacity to make financial or legal decisions for themselves. That Power of Attorney must have a Durable provision that says it survives incapacity of the Principal. Without a Durable provision, a Power of Attorney is not valid if the Principal becomes incapacitated.  Also, certain powers, if they are not specifically set out in the document, are not granted to the agent. In New Jersey, one such power is gifting the Principal’s assets.
One of the most important things to remember about Powers of Attorney is that they must have been executed prior to the Principal becoming incapacitated. Once a person becomes incapacitated, they no longer have the ability to execute legal documents, and guardianship must be sought to allow an agent authority to make legal and medical decisions for that person.
All Powers of Attorney are not created equally. Powers of Attorney serve different purposes and provide different levels of power and authority. As you contemplate creating a Power of Attorney, you need a clear understanding of the different levels of Power of Attorney authority.
For more information, contact Robert Poserina & Andrea McHugh at (609) 463-8125 or visit www.capemaycountyelderlaw.com. Located at 1029 S. Route 9, Cape May Court House.