Table of contents:
Definition and Purpose
Understanding the legal documents known as a power of attorney and a living will can provide peace of mind and ensure your wishes are respected in the event of incapacity.
Power of Attorney
A power of attorney is a legal document that grants authority to another person, known as the agent or attorney-in-fact, to make decisions on your behalf. It can be used to handle various matters, such as financial transactions, property management, and healthcare.
Living Will
A living will, also known as an advance directive, is a legal document that expresses your wishes regarding medical treatment if you become incapacitated and unable to communicate them yourself. It allows you to make decisions about life-sustaining treatments, such as artificial respiration and feeding tubes.
Types of Power of Attorney
Power of attorney can be classified into several types, each designed for specific purposes and circumstances. Understanding the different types is crucial for selecting the most appropriate document for your needs.
Durable Power of Attorney
A durable power of attorney remains valid even if the principal becomes incapacitated. This type of power of attorney is often used to manage financial matters, such as paying bills and managing investments, when the principal is unable to do so themselves.
Non-Durable Power of Attorney
A non-durable power of attorney terminates if the principal becomes incapacitated. This type of power of attorney is typically used for specific tasks or transactions, such as selling a car or signing a contract.
Springing Power of Attorney
A springing power of attorney becomes effective only when a specific event occurs, such as the principal’s incapacity or absence. This type of power of attorney is often used to manage affairs in the event of an emergency.
Limited Power of Attorney
A limited power of attorney grants authority to the agent to perform specific tasks, such as managing a bank account or handling real estate transactions. This type of power of attorney is often used when the principal wants to retain control over certain aspects of their affairs.
General Power of Attorney
A general power of attorney grants broad authority to the agent to make decisions on behalf of the principal. This type of power of attorney is often used when the principal is unable to manage their own affairs and needs someone to act on their behalf.
Legal Requirements
Power of attorney and living wills are legal documents, so it’s essential to follow the legal requirements when creating them.
Power of Attorney
Each state has its own specific legal requirements for creating a power of attorney. Generally, the following requirements must be met:
- The document must be in writing.
- The principal must be of sound mind and body.
- The agent must be over the age of 18 and competent.
- The document must be signed by the principal and the agent.
- The document must be notarized.
Living Will
The legal requirements for creating a living will vary from state to state. However, the following requirements are generally required:
- The document must be in writing.
- The principal must be of sound mind and body.
- The document must be signed by the principal.
- The document must be witnessed by two witnesses.
Rights and Responsibilities
Under a power of attorney, both the agent and the principal have certain rights and responsibilities.
Rights of the Agent
- To act on behalf of the principal in accordance with the powers granted in the document.
- To be reimbursed for reasonable expenses incurred while acting as agent.
- To be compensated for services rendered, if agreed upon in the document.
- To be protected from liability for actions taken in good faith and within the scope of their authority.
Responsibilities of the Agent
- To act in the best interests of the principal.
- To exercise reasonable care and diligence in carrying out their duties.
- To keep accurate records of all transactions conducted on behalf of the principal.
- To account to the principal for all actions taken and property handled.
Rights of the Principal
- To revoke the power of attorney at any time, unless the document states otherwise.
- To receive regular reports from the agent regarding their activities.
- To be protected from any unauthorized or negligent actions of the agent.
Responsibilities of the Principal
- To provide the agent with clear instructions and guidance.
- To review and approve the agent’s actions regularly.
- To compensate the agent for services rendered, if agreed upon.
Duration and Revocation
A power of attorney remains valid until it is revoked or the principal becomes incapacitated. Revocation can occur in several ways:
By the Principal
The principal can revoke a power of attorney at any time, even if the agent has already begun acting under it. The revocation must be in writing and signed by the principal.
By Operation of Law
A power of attorney is automatically revoked upon the death of the principal. It may also be revoked if the principal becomes incapacitated, such as if they are declared legally incompetent.
By Court Order
A court may revoke a power of attorney if it finds that the agent is not acting in the best interests of the principal.
Power of Attorney vs. Living Will
A power of attorney and a living will are both legal documents that give someone the authority to make decisions on your behalf. However, there are some key differences between the two documents.
A power of attorney is a legal document that gives someone the authority to make financial and legal decisions on your behalf. This can include things like managing your finances, signing contracts, and making decisions about your property.
A living will, on the other hand, is a legal document that gives someone the authority to make medical decisions on your behalf if you are unable to make them yourself. This can include things like deciding whether or not to receive life-sustaining treatment.
Key Differences
- Purpose: A power of attorney is used to make financial and legal decisions, while a living will is used to make medical decisions.
- Timing: A power of attorney can be used while you are still alive and able to make decisions, while a living will only takes effect if you are unable to make decisions for yourself.
- Scope: A power of attorney can give someone broad authority to make decisions on your behalf, while a living will only gives someone authority to make medical decisions.
When to Use a Power of Attorney or Living Will
Determining the appropriate time to utilize a power of attorney or living will depends on specific circumstances and personal preferences. Understanding the purpose and legal implications of each document is crucial for making informed decisions.
A power of attorney is typically used when an individual anticipates being unable to make decisions or manage their affairs due to incapacity or extended absence. It grants legal authority to a trusted agent to act on their behalf, ensuring continuity in financial, legal, and medical matters.
When to Use a Living Will
A living will becomes relevant when an individual wishes to express their preferences regarding end-of-life medical care in advance. It provides instructions to healthcare professionals on specific treatments and procedures they would like to receive or decline if they become terminally ill or permanently unconscious.
Legal Considerations
When creating a power of attorney or living will, it’s crucial to consider the legal implications to ensure the document is valid and enforceable.
Understanding the legal requirements, such as the need for witnesses and notarization, is essential. Additionally, it’s important to clearly define the powers granted to the agent and any limitations to avoid potential disputes.
Common Legal Pitfalls
To avoid legal pitfalls, consider the following:
- Lack of Capacity: Ensure the principal has the mental capacity to understand the document’s purpose and consequences.
- Undue Influence: Prevent the document from being influenced by coercion or manipulation.
- Ambiguity: Draft the document clearly and precisely to avoid confusion or misinterpretation.
- Improper Execution: Follow the legal requirements for execution, including witness signatures and notarization.
- Conflicts of Interest: Consider the potential for conflicts of interest between the principal and the agent.
