There are times in life when someone may be asked to fill out a power of attorney form. At another time someone may decide that they need a formal means of allowing someone to act on their behalf. Some people may have heard of a power of attorney, and others may only know such a creature exists but have only a vague idea of what it does. So let’s define it, see when it could be used, see what types there are and what are the disadvantages and advantages.
In its simplest form, a power of attorney is a formal, legal means of delegating your authority to make certain decisions and act on your behalf – on your behalf – to someone else. The types of legal action permitted are generally defined to some extent and allow the document holder to make day-to-day decisions on your behalf, represent you in specific legal situations, or manage a business, legal, or financial situation on your behalf. A completed power of attorney form can describe very specific situations in which it can be used, or it can be very broad in scope, depending on your preference.
The power of attorney is usually used in the form of a kind of pre-emptive strike. You know that you cannot take care of certain matters, for example, and delegate the task of acting on your behalf to someone else. For example, members of the military are often not at home when important events are taking place, so they can run to the Judge Advocate General’s (JAG) office and fill out a power of attorney form so that their spouse can handle specific events on their behalf. An executive or business owner may not be able to be physically present at a significant business event and may authorize another person to act on his or her behalf. Others may simply be planning ahead for a time when they may not be able to make certain decisions themselves. Completing what is generally a relatively simple form gives them peace of mind that someone they trust is in charge and legally able to act on their behalf.
There are basically two types of powers of attorney – permanent and temporary.
Perpetual Power of Attorney allows another party to act on your behalf in almost any form or type of business or transaction. Someone looking to part with at least semi-permanently certain activities, such as buying and selling stocks or managing real estate, might choose this option. People who are disabled and unable to travel to attend to their own affairs can appoint a person of trust who is authorized to act on their behalf. Someone preparing for a day when they may not be able to accurately assess and act on matters that require their thinking, deciding, and acting can prepare for that time.
The limited power of attorney is a simpler matter. It is used to allow your representative to act on your behalf but with certain limitations. In principle, two restrictions are possible:
* By Assignment: This form specifically states that the power of attorney given is for a specific purpose…for example, buying a car or selling a specific piece of property.
* By Time: In this case, specific date limits are set. This could be used when you are out of the country for a week or two but want to make sure certain things are done while you are away.
Indeed, as you can see, it can be handy to have someone available to act on your behalf during times when you may be unavailable or unable to work. This “authority officer” can help you manage your affairs while you are preoccupied with other situations or events. All you have to do is present and sign the power of attorney form you have prepared, or pretend to be there yourself. The level of authority, either by task, by time, or both, can be easily written into the document. In the limited form, the power of attorney granted expires automatically at a certain point in time or when the task is completed, but you can revoke it at any time as the first creator.
It’s a simple task, but in some cases legal counsel may be advised. It’s also a common task and you’ll be able to find well-designed power of attorney forms at office supply stores and online.