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An Overview of Powers of Attorney (POA)

Published: May 19, 2022

Estate planning involves implementing Power of Attorney (POA) documents. All states recognize powers of attorney, but rules and requirements will differ from state to state. The document gives one or more individuals the legal authority to act as your agent or proxy on your behalf. Depending on which POA you choose, the agent’s power may be limited to a particular activity, such as a real estate sale, or cover broader applications.

How Powers of Attorney Work

A Power of Attorney may give permanent or temporary authority and be invoked immediately or be activated by a future event, such as mental or physical disability. The latter is known as a “springing” Power of Attorney. Powers of Attorney may be rescinded, but most states will require written notice of revocation to the named individual or entity. 

Some Powers of Attorney are nondurable for the sake of convenience, especially in the case of a single transaction, such as a property sale. Your agent may conduct the sale of a boat or a home described in the POA document. If you are traveling abroad or know you cannot transact this business, a nondurable power of attorney can be greatly beneficial. Once the time period or transaction is complete, the nondurable power of attorney terminates.

A general power of attorney permits the agent to deal with any matters on your behalf that state law allows. Under such an agreement, the proxy may sign checks, handle bank accounts, sell property, manage assets, and file taxes when you are unable. This POA has a wide latitude of authority. Therefore, there needs to be coordination between you and your agent to ensure your best interests are always represented. 

Durable Powers of Attorney

The better-known Powers of Attorney are durable and take effect upon incapacitation. The word “durable” means the powers will remain intact even when you can no longer manage your affairs. There are two types of Durable Powers of Attorney. One handles financial matters, and the other manages medical affairs, often called a healthcare directive or proxy. 

Without these Powers of Attorney in place, a court may need to appoint individuals to act on your behalf upon your incapacitation. Depending on your state laws, these individuals are known as conservators, guardians, or committees. This type of court intervention can be expensive, time-consuming, and is a public proceeding. Most people prefer to keep their matters private by implementing powers of attorney documents in their estate plans to avoid conservatorships.

Financial Power of Attorney 

This durable power of attorney permits an agent to manage your financial and business affairs, similar to a general power of attorney. When you become incapable of managing your affairs, the agent’s responsibility is to carry out your wishes to the best of their ability. If the financial power of attorney is also a beneficiary of your estate, they must act with great care to avoid misinterpretation of intent. This document is not just for seniors. An unforeseen illness or unfortunate accident can render a healthy, younger individual incapacitated and in need of financial assistance.

Healthcare Power of Attorney (HCPA) or Proxy

An HCPA is also known as a healthcare proxy and permits a designated person or agent to make healthcare and medical decisions according to your specific instructions or their best understanding of your wishes. Again, consenting to an HCPA agent for medical care decisions is not only relevant to seniors. An unforeseen illness or accident can render a healthy, younger individual incapacitated, which is why an HCPA is a crucial estate planning document.

The best way to establish powers of attorney is to locate a qualified estate planning attorney. They can help you assess which power of attorney is necessary for your unique situation. They also understand the criteria for identifying the individuals or agents to represent your interests. Delegating general and limited powers to agents can create family strain during the planning stages. An estate planning attorney is familiar with the nuances of these family issues should they arise and how to move forward for all concerned. The biggest benefit of having these matters settled before incapacitation or death is allowing a family to care or grieve for their loved one instead of being bogged down in logistics. We hope you found this article helpful. If you have questions or would like to discuss your legal matters, please do not hesitate to contact our office at 215-364-1111 to schedule a consultation.

CLIENT Testimonial

Scott Bloom Law Estate Planning Diagram

Sometimes after a loved one passes away, the family learns of things they were unaware of while the loved one was living. This was the case for one of our clients, Sam, after his father Tom Jr. passed away. Sam was always under the impression that the home he had grown up in, and that his father had lived in until his death, was owned by Tom Jr. To say it came as a surprise that it was indeed Sam’s grandfather, Tom Sr., who was the actual owner of the home, is an understatement. 

Apparently, when Tom Sr. had passed away nearly 40 years ago, there was no proper estate plan established. Now, Sam would need to open his grandfather’s estate, resolve tax issues that were never addressed, and then go through the legal process to make the home a part of his father’s estate. At first, Sam believed that the entire process would be easy enough for him to handle on his own. However, after digging a little deeper, he quickly realized he would need the help of a knowledgeable and experienced attorney.

Sam reached out to Scott Bloom Law and we developed a game plan for moving forward. We began by probating Tom Jr.’s will and, after some time, we were able to settle the estates of both Tom Sr. and Tom Jr. While it was no fault of Sam, this is a great example of the importance of having an Estate Plan in place. No one wants to leave their families in precarious situations after they pass. The long-term purpose of setting up an Estate Plan today is to preserve as much of your wealth as possible for the intended beneficiaries and retaining a capable attorney can help ensure all of your wishes are met.

At Scott Bloom Law, we are a team of advocates who care, always fighting for what’s best for our clients and their families. With knowledge, experience, and compassion, we strive to find solutions that make the aging process as emotionally and financially easy as possible. Visit us at scottbloomlaw.com or call 215-364-1111, to talk to find out more.

- Case Study: Estate Administration

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CLIENT Testimonial

Scott Bloom Law Estate Planning Diagram

Sometimes after a loved one passes away, the family learns of things they were unaware of while the loved one was living. This was the case for one of our clients, Sam, after his father Tom Jr. passed away. Sam was always under the impression that the home he had grown up in, and that his father had lived in until his death, was owned by Tom Jr. To say it came as a surprise that it was indeed Sam’s grandfather, Tom Sr., who was the actual owner of the home, is an understatement. 

Apparently, when Tom Sr. had passed away nearly 40 years ago, there was no proper estate plan established. Now, Sam would need to open his grandfather’s estate, resolve tax issues that were never addressed, and then go through the legal process to make the home a part of his father’s estate. At first, Sam believed that the entire process would be easy enough for him to handle on his own. However, after digging a little deeper, he quickly realized he would need the help of a knowledgeable and experienced attorney.

Sam reached out to Scott Bloom Law and we developed a game plan for moving forward. We began by probating Tom Jr.’s will and, after some time, we were able to settle the estates of both Tom Sr. and Tom Jr. While it was no fault of Sam, this is a great example of the importance of having an Estate Plan in place. No one wants to leave their families in precarious situations after they pass. The long-term purpose of setting up an Estate Plan today is to preserve as much of your wealth as possible for the intended beneficiaries and retaining a capable attorney can help ensure all of your wishes are met.

At Scott Bloom Law, we are a team of advocates who care, always fighting for what’s best for our clients and their families. With knowledge, experience, and compassion, we strive to find solutions that make the aging process as emotionally and financially easy as possible. Visit us at scottbloomlaw.com or call 215-364-1111, to talk to find out more.

- Case Study: Estate Administration

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