Nobody knows what the future holds, and life circumstances can change in an instant. Unfortunate events such as an accident or illness can lead to a debilitating injury and cause someone to become incapacitated. That is why it is helpful to document your wishes regarding healthcare or financial matters if unforeseen events render you incapable of making critical decisions. A power of attorney (POA) is a legal document that delegates authority to one person to make decisions on behalf of the individual who executes it. A POA can give directives on how finances and legal issues should be handled.
Types of Powers of Attorney
The person who signs or executes the POA is referred to as the Principal. The person to whom the decision-making capability is given is called the Agent. In some situations, more than one Agent may be chosen. It is critical for Principal to selects a trusted person as their agent, such as a family member or close friend. There are different types of POAs depending on when they will be in effect. The following are the different types of POAs in New York:
- Nondurable Power of Attorney: This kind of POA is typically used for a specific scenario if the Principal cannot be there in person. For instance, it may be used during closing on the sale of real estate property, or when a person is tasked with supervising the Principal’s financial affairs while he or she is traveling overseas.
- Durable Power of Attorney: This type of POA enables the Agent to act for the Principal when the Principal is not competent to make their own decisions. The Durable POA may be used immediately, and it is effective until the Principal revokes it, or upon the Principal’s death.
- Springing Power of Attorney: This type of POA becomes effective at a future time. That is, it “springs into effect” at the onset of a certain event designated by the Power of Attorney. In many cases, POA will become effective if the Principal suffers a disease such as Alzheimer’s or disability due to a catastrophic accident.
POAs also helps avoid the expense of having a Guardian appointed by the court to handle the Principal’s affairs in cases of incompetence or disability. In the state of New York, it is important to note that the delegation of healthcare decisions is made with a separate legal document called a Healthcare Proxy.
What Activities Are Allowed Under a POA?
A POA allows the Agent to act as the Principal on specific types of legal or financial transactions. It is up to the Principal to determine which matters are included in the POA, but below are some common examples of actions an Agent may be able to take:
- Buy or sell real estate
- Manage the Principal’s property
- Perform banking transactions
- Invest money
- File legal claims and participate in litigation
- Conduct tax and retirement business
- Make insurance transactions
- Give gifts on the Principal’s behalf
Contact a Brooklyn Estate Planning Lawyer
Planning ahead is never a bad idea, especially when it comes to important issues like your finances. Having a power of attorney is a way to safeguard against problems in the event you become incapable of making decisions for yourself. The POA acts on your behalf in case you suffer a serious injury or sickness and are not competent to decide important life matters. A skilled New York City power of attorney lawyer can make sure you understand the legalities of creating a POA to protect yourself and prevent disputes between family or friends in the future. To schedule a free consultation, call our office today at 718-645-6677.
Sources:
https://www.osc.state.ny.us/retire/members/power-of-attorney.php
https://www.tax.ny.gov/poa/
