The Importance Of A Power Of Attorney

Without an extensive power of attorney (POA), a lot of men and women are unable to deal with the financial affairs of their loved ones, nor make health care decisions without court intervention (conservatorship and guardianship). Unfortunately, it continues to be our experience that lots of people, including financial advisors, accountants and even some attorneys do not understand what one is and why it is so important to get one. Clients frequently come into our office supposing, just because they’re married or are a joint owner of resources, they can sell or transfer resources. Actually, a current client can’t sell his mother’s home because she signed a durable power of attorney.

A power of attorney is a legal document by which one person (the principal) authorizes another (the agent) to act in their behalf. You will find durable powers of attorney that authorize your representative to make decisions for you concerning monetary matters and healthcare powers of attorney which permit your agent to make decisions regarding your health needs.

Yours can be broad in scope, providing your broker the ability to make any and all financial decisions for you (a General Durable POA) or you can restrict your agents authority by defining the types of financial decisions you may permit them to create (a Limited Durable POA). You may also prefer to give your broker the immediate authority to make decisions on your behalf (a Durable POA) or you can restrict your agents authority to act only when you become incompetent (a Springing POA).

Guardianship is a legal relationship in which the court gives a person (the guardian) ability to make personal decisions (medical, home, etc.) for another (the ward). A proceeding is initiated by filing a petition in the probate court. A written statement by a physician might be necessary to establish the ward’s incapacity. The court then decides whether a guardian is needed on account of this ward lacking the necessary mental ability to make personal decisions. Unless limited by family law attorney , the guardian has the very same rights as parents have over their small children. The guardian is required to report yearly to the court regarding the state of the ward.

A conservator is a legal relationship whereby the probate court gives a person (the conservator) the power to make financial decisions for another. The court proceeding are similar to those of a guardianship except the court is deciding whether the person has the capacity to manage his or her financial affairs. A conservator is also required to file an annual accounting documenting (with verification) all of their earnings and expenses incurred each year. A surety bond (an insurance policy) is frequently needed by the court to protect against the conservator engaging in any improper use of the person’s assets.