Power of attorney gives another individual, or “agent,” the legal authority to make decisions for another person, or “principal,” who is unable to make his or her own decisions due to health, injury, or any other forms of unfortunate circumstances.

To start, the principal will determine the amount of power given to the agent:
specific power of attorney: allows the agent to deal with only one particular issue
general power of attorney: has the agent handle most of the principal’s personal and financial matters

In terms of a general power of attorney, there are many types of decisions that the agent granted power of attorney can make; including, but not limited to:

• Make financial decisions
• Make gifts of money
• Make health care decisions, including the ability to consent to giving, withholding, or stopping medical treatments, services, or diagnostic procedures
• Recommend a guardian

When you assign power of attorney, that agent is typically paid. At power of attorney creation, the principle should decide on a set amount or a set method for determining a pay scale. If the principal does not provide for these payments in his or her power of attorney document, the court will determine how much the agent will earn.

As a part of their duty, the agent will be required to keep accurate records for all transactions that he or she makes on behalf of the principal. These records should be made available to the principle or other named individuals.

Who is granted power of attorney should not be taken lightly. Because the actions of the agent are legally considered to be those of the principle, they are acting in the principle’s name, the principle should always choose a trustworthy individual.

Power of attorney can be granted to a number of different types of people or entities; including, but not limited to:

• Spouse
• Adult child
• Relative
• Trusted friend of the principal
• Attorney or law firm providing power of attorney

Although power of attorney follows general guidelines across the country, there are specific laws that vary from state to state. Make sure to consult an attorney concerning all applicable laws and regulations when setting up power of attorney.

If you are interested in learning more about assigning power of attorney or the overall benefits of Estate Planning, then we can help.