A power of attorney authorizes someone to act on your behalf. It is very important when a person becomes ill.

For example, suppose your mother or father becomes unable to manage his/her financial affairs. Without a Power of Attorney signed by your parent when she/he was competent, you may not be able to access their bank accounts or transact business on their behalf. Even though everyone at the bank may know you and have seen you with your parent for years, they are not supposed to give you access to his/her account if you have no Power of Attorney and your name is not on his/her account.

A spouse does not have the right to get information about her husband’s benefits if he is sick and she has no Power of Attorney. If you are trying to pay your spouse’s credit card bills, the company will not even tell you what is owed or if she/he made any payments.

A Power of Attorney also prevents unauthorized persons from getting access to your accounts. A Power of Attorney can be taken to the bank or to any organization that you are accustomed to doing business with. Once in their files, the person you authorize can transact business for you but no one else.

A Power of Attorney keeps untrustworthy people away from your affairs. With identity theft being so rampant, it is important to clearly state who can act for you. Sometimes people in your own family will attempt to do things against your wishes. If your bank has a copy of your Power of Attorney it can prevent the unauthorized access to your accounts.

You can authorize a person to only act in a limited situation. You can limit the types of actions you authorize the person you are appointing to do. You can limit the dates of effectiveness of the Power of Attorney.

For example, if you are selling a house and cannot attend the settlement closing, you can execute a Limited Power of Attorney authorizing your “attorney-in-fact” to sign documents for you only at that settlement closing. The terms of the Power of Attorney can limit your “attorney-in-fact” or “agent” to signing documents only for that property or only on a specific occasion.

A General Power of Attorney authorizes your “attorney-in-fact” to sign any document and to act on your behalf as if you were personally present.

A Power of Attorney grants authority to an agent to perform acts on one’s behalf, such as signing checks, withdrawing money from financial accounts, executing documents, selling real estate, or making decisions about other legal and financial affairs.

It is very important to say if a Power of Attorney is “durable.”  A Durable Power of Attorney retains its authority if the principal becomes incapacitated.  The principal is the person granting the power.

So, if your intention is for your “attorney-in-fact” to be able to transact business for you even if you become incapacitated, it is very important that your Power of Attorney says that it is durable.

Some states have laws that say a Power of Attorney is presumed to be durable even it doesn’t say so. Don’t rely on that presumption. Be sure your Power of Attorney says if it is durable or not.

Some Power of Attorneys are “springing.” This means that the attorney-in-fact is not authorized until an event happens. Often the principal creating the power wants to maintain sole control over their affairs as long as they can and only wants his or her agent to be empowered if and when he or she becomes incapacitated. In such a case, the Power of Attorney does not become effective unless the principal is incapacitated.