What is a “POA” – Power of Attorney?
A POA allows you to delegate legal decision-making to another person.
It is an extremely flexible, and when set up correctly, a very powerful tool that can help you save – and even earn – more time and money.
It can take effect immediately or at some specified time in the future.
When Do I Need a POA?
POA for Business
Depending on your business model, there may be a number of reasons why you may need a power of attorney.
Certain types of deals, contracts, or authorization in your business most only be handled by you personally.
But for business matters you’d like to handle in person but can’t be there physically due to time, money, or other constraints, you can easily delegate to an agent of your choosing (in CA, your agent must be 18 years old).
When you create the right type of POA and appoint an employee or contractor to act as your agent, you can get business done that requires your signature or authorization with that personal touch you want to create for your clients while you’re handling other business.
POA for Travel
In today’s world, a lot of legal documents can be signed online, so traveling abroad is often not a factor that would inhibit business or personal transactions.
But sometimes, depending on where you are traveling, the connectivity or technology may be a barrier to carrying on business as usual. And there are a variety of other factors that may come in to play when you travel, like politics or even weather, that may make carrying on business more difficult.
When you draft a POA the right way, you can give another person the authority to act on your behalf only during specified times you’ll be out of the country, and terminate that power upon your return.
POA for Estate Planning
As you age, or due to an unfortunate accident, you may begin to lose “mental capacity” – the mental state required to make legally binding decisions.
This could be due to dementia, Alzheimer’s, mental illness, or other physical conditions leaving you physically unconscious.
The POA is an important part of estate planning in conjunction with your affordable living trust, because you can use it to delegate another person, such as your spouse, a family member, or an independent trustee, the power to conduct financial business on your behalf, upon the occurrence of certain conditions (like incapacity).
You can appoint one agent or several to act on your behalf, and you can decide whether multiple agents can act independently, if they must act jointly, and appoint specific agents to handle different types of tasks.
Setting up your power of attorney now can avoid a huge headache later trying to get financial power over a person who is already deemed incapacitated, such as through a conservatorship, which can be very costly and take a lot of time in probate court.
Best of all, you can set up your power of attorney all on your own, for only $35 using my attorney-guided form with instructions.