There may come a time when, due to unforeseen circumstances, such as health issues or even personal absence, we might find ourselves incapable of making critical decisions about our assets. During such occasions, the Power of Attorney (POA) is a valuable legal tool that allows us to ensure flawless management that safeguards our interests.
The following blog discusses the importance of Power of Attorney for property and why individuals must establish one.
What is Power of Attorney (POA)?
A Power of Attorney (POA) is a legally enforceable document that designates someone else as having the power to manage another person's finances, medical needs, or real property. Without the party who established the POA, this chosen agent has the authority to decide and take action. The authorised agent's judgments are legitimate in law. The individual authorised to carry out these duties is the agent. And the person granted the authority to act on their behalf will be termed the principal, grantor, or donor.
A well-executed POA empowers individuals to delegate decision-making power for financial, healthcare, or other personal matters by granting authority to a trusted individual or entity.
Types of Power of Attorneys
The power of Attorneys is classified into several types that are majorly based on the level of authority granted to them by the principal. Some of the examples are given below:
1. Conventional or General Power of Attorney
Termed the General Power of Attorney (GPA), this type is limited to a specific duration or purpose. The appointed agent possesses the authority to make business or personal decisions on behalf of the grantor. As the level of responsibility is confined in this form, it is commonly referred to as a limited power of attorney.
2. Medical Power of Attorney
Incorporating durable and springing aspects, the Medical Power of Attorney is designed to facilitate healthcare or medical decisions. It does not come into effect if the grantor is of sound body and mind, fully conscious, and able to make independent decisions. In such cases, the POA agent may perform tasks like paying medical bills on behalf of the grantor. However, the agent is not authorised to make decisions regarding the termination of life support systems for the grantor, should the need arise.
3. Springing Power of Attorney
Functioning based on specific conditions, dates, or events, the Springing Power of Attorney comes into effect when the grantor becomes incapacitated. Until that triggering event occurs, the authority of the agent remains inactive.
4. Durable Power of Attorney
This type remains in effect for the entire lifetime of the grantor, enabling the agent to make decisions even if the grantor becomes incapacitated. The Durable Power of Attorney stays in force unless it is revoked by the grantor or upon its demise.
Conclusion
Understanding the significance and need for Power of Attorney for property is crucial, especially for individuals seeking to manage their affairs and secure their future proactively. Also, it is crucial to remember that a well-executed Power of Attorney will not only safeguard your interests but also grant you and your loved ones the confidence and security to navigate life's uncertainties with ease.
