Power of Attorney information
Have you taken a very long vacation and wondered if someone back home could handle your finances? Yes, today with computer systems it isn’t an often asked question, but what if you were in the hospital for an extended period of time? What are your options?
The solution is to designate someone you trust with power of attorney. Did you know there are different types? There are and each has different rules and purposes. Here is a basic description:
Limited power of attorney. With this option you grant only narrow rights. For example you could give a friend your check-writing powers while you are on an extended vacation. Limited powers are revoked if you become mentally disabled.
Ordinary power of attorney. This permits broader powers over your finances. This power of attorney also expires if you become mentally disabled.
Durable power of attorney. This is usually the most encompassing as it does grant all powers. A durable power of attorney remains effective if you become incapacitated.
Springing power of attorney. This type is also broad, but does not become effective unless you become mentally disabled or otherwise incapacitated. A springing power of attorney lets you provide your own definition of “incapacitated.” You may want to limit the term to a judgment, rendered by the court, that you are senile. Or, you could define it as lapsing into a coma for more than a specified number of days.
All powers of attorney expire when you die. That is why you must also specify a personal representative to take care of your affairs after your death.
You can probably fill out a power of attorney form yourself rather than hire a lawyer. Most stationery and business supply stores sell preprinted, one-page durable power of attorney forms you can fill out. You can even cross out provisions or make addendums, although you should keep such changes to a minimum. Several computer programs are available to make it even easier. Durable power of attorney laws vary from state to state, however, so do check local laws.
OK, so what do you do when you are ready to take back control and end the power of attorney? Can you even do this? You have the right to terminate or revoke a durable or nondurable power of attorney at any time, as long as you are still competent, for any reason or no reason.
You must notify the holder of the power, preferably in writing, that you are revoking the power and that you no longer wish him or her to act as your attorney-in-fact. Specify the power you are revoking.
To protect yourself, have the person return the original power of attorney form to you, and destroy any copies you have made. Be sure to tell your family members, friends and others about the change and who, if anyone, has the new power of attorney. Keep the documentation of the cancellation of power of attorney.
It would also be wise to do a search for unclaimed money. The found money then could be added to your financial portfolio. Thus another safeguard against people claiming funds that are not theirs.
