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What is a Power of Attorney and Why Do You Need One?

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December 17, 2020 Advance Planning

As you grow older, your chances of experiencing a health crisis and becoming ill increase. Therefore, it’s important to have plans in place in case you are unable to make decisions for yourself. That’s where a power of attorney (POA) comes in. Let’s explore what a POA is and why you should have one.

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What is a POA?

A power of attorney is a legal document that gives someone the power to act for another person in the event of illness or disability. They may have broad legal authority or limited authority to make decisions regarding property, finances, or medical care. A general power of attorney acts on behalf of the individual for any and all matters that are allowed by their state, while a limited POA can act in specific matters explicitly stated in the document. However, if you want the power of attorney to remain in effect after the individual’s health deteriorates in the event they become incapacitated, you’ll want to sign a durable power of attorney (DPOA).

Durable Power of Attorney

Even when the individual becomes mentally incapacitated, the DPOA controls certain legal, property, and financial matters. They can also sign a durable power of attorney for healthcare, also known as a healthcare power of attorney (HPOA). This allows them to make health-related decisions and legally binds them to oversee the individual’s medical care decisions. Individuals can also sign a DPOA for financial matters.

Why Should You Have a POA?

Although there are many good reasons to have a power of attorney, the main benefit is ensuring someone will take care of your affairs in the event you become incapacitated. Many risks come with signing a legal document like this, so it’s crucial to choose a trusted family member, close friend, or dependable professional to be your power of attorney.

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