What is a power of attorney (POA)? A power of attorney is a legal document that allows you to appoint a person to be your agent who then has the authority to manage your affairs. You may decide to appoint an agent under a power of attorney if you become incapacitated or for some other personal reason (such as an overseas trip). The person authorizing the other to have this power is the principal.
Giving a power of attorney to an agent is basically giving the agent a blank check to do with your affairs as they see fit. Most of the time, state laws and provisions of the power of attorney require that the power you give is to be used for your benefit. You have to be very careful who you give this power to because they will have the ultimate power over all of your affairs if you are unavailable. The agent is supposed to act in the best interest for the person that gave them the power, but there is really no one to hold them accountable for their decisions while the person they are responsible for is still living. It is only after the principal has passed away that the power of attorney can be held responsible.
We often see situations in estate planning where a person has given power of attorney to someone who is not trustworthy and the problem is not discovered until after the person dies. By then, it is too late and their money is gone. It is very important when you are dealing with these types of documents, that you talk with an attorney, especially if you have a large estate. Often the best course of action is to deliver a power of attorney to your estate planning attorney with instructions to give it to your agent only if a letter from a doctor substantiates your incapacity. If you would like help with your estate planning, please call us at 541-317-0231.