Designating a power of attorney (POA) for your accounts serves several purposes. A POA can act on your behalf during a real estate investment transaction or make decisions regarding personal financial assets or medical care if you become incapacitated.
Explore different types of power of attorney, what they are used for, and how to get power of attorney for your assets.
Power of attorney (POA) is an official legal designation that gives a specific person, called an agent, power to act on another person’s behalf. A POA authorization can apply to the full scope of your assets. You can also designate a POA for decision-making in limited areas such as medical care, investments, property, or wealth management.
There are multiple reasons to designate a POA to manage your affairs. The most common is to set up a POA to make legal decisions on your behalf if you become incapacitated or pass away. In this case, your POA can act in your best interests and help your family avoid drawn-out legal proceedings in probate court.
You may wish to designate a POA to handle your real estate transactions. If you often travel or live far away from where you are investing, a POA can attend meetings, sign documents, and perform other tasks that make building your wealth simpler.
You may also designate a POA to handle your investments and enact wealth management strategies to grow your assets. Many people designate POA to a trusted financial advisor, which allows them to make financial decisions on your behalf.
To get a POA for your accounts, speak with an estate planning attorney or qualified business or tax lawyer. Working with a legal professional is important when designating a POA because it ensures that it meets all state and federal requirements. It also ensures your POA document uses appropriate language that allows your POA to conduct business on your behalf.
When selecting your POA, determine the scope of power to give to your agent. The three most common types of POAs are conventional, durable, and medical.
When setting up a POA for your assets, you decide the parameters of power. Consider your needs and speak with your lawyer to craft a POA document that lays out the terms and conditions of the POA designation so that you can protect and grow your wealth.