Powers of Attorney (POA)
Powers of Attorney (POA)
The knowledge and action to prepare for the future gives you “peace of mind”. The present is a gift that we enjoy, but the future is unknown, so to secure yourself and your family for the future, it is necessary to take certain steps in the present. For instance, a lot of people are not aware that a Durable Power of Attorney may be necessary, even if you are married. That way your spouse will be able to act on your behalf, if you are incapacitated.
Nicholas and Martha are aware that unless you have an asset that is joint owned, one doesn’t assume the right to speak or act for the other spouse without a Power of Attorney (POA). This POA document may allow others to speak and/or act for you, either in tax, financial, legal or healthcare matters. The person you give permission to act on your behalf is called an Agent. An Agent is the one who represents, and the Principal is the person who needs representation or assistance.
It’s important to understand that while the agent has your permission to act, speak, sign, and obligate agreements on your behalf; it is a requirement that the agent put YOUR best interests in front of everyone else, including the agent acting on your behalf. This is known as a fiduciary responsibility. All agents have a fiduciary responsibility to protect the principal they represent in all matters.
If you have a Mental Health or Healthcare (medical) Power of Attorney, be sure to include the Health Insurance Portability and Accountability Act (HIPAA) inclusion paragraph that allows you to receive personal medical information about the principal you represent.
If you act as an agent or POA for anyone, be sure to understand the Agency law of the state you live in. Consult an attorney and have them give you instructions in writing as to your responsibilities as a POA. When signing documents as a POA, always sign your name and the initials “POA” after your signature, to let others know you have permission to act. Do not sign the name of the principal. There are many kinds of Powers of Attorney.
Some of the Powers of Attorney are listed below:
- Immediate Power of Attorney
As soon as you sign it, someone can act on your behalf.
- Springing Power of Attorney
It springs into action upon a certain condition (such as incompetence or incapacitation or absence).
- Durable Power of Attorney
Husbands and Wives, or partners, should have a Durable Power of Attorney on each other. In some states, if a husband and wife begin to refinance a home and one of them becomes disabled during the finance, a Durable Power of Attorney must be executed prior to the disability, to finish the refinance. (Otherwise a Court Order must be issued naming the spouse or partner as Guardian. This Court Order requires legal fees and an appearance before the court). A Durable Power of Attorney allows financial/legal decisions to be made on your behalf by an agent.
- Don’t forget HIPAA or privacy provisions
POA’s cannot receive personal info from financial, legal, or healthcare professionals without this addition.
- Healthcare Power of Attorney
Appoints a person (Agent) to make medical decisions for you.
- Mental Health Power of Attorney
Makes mental health decisions for you (check in or out of mental health facility).
- Living Will
Directs actions to be taken if condition is terminal or death imminent. This is not a regular Will. It is instructions to dis-continue care or “pull the plug”, under certain conditions.
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Mr. Hockensmith has been a guest newscaster for national and local TV stations in Phoenix since 1995, broadcasting financial and tax topics to the general pubic. He has written tax and accounting articles for both national and local newspapers and professional journals. He has been a public speaker nationally and locally on tax, accounting, financial planning and economics since 1992. He was a Disaster Reservist at the Federal Emergency Management Agency, for many years after his military service. He served as a Colonel with the US Army, retiring from military service after 36 years in 2008. Early in his accounting career, he was a Accountant and Consultant with Arthur Andersen CPA’s and Ernst & Young CPA’s.