Appointing a Power of Attorney is incredibly important when it comes to estate planning and making arrangements for the end of your life. It’s important to know the reasons why POA is so important, as well as what you should consider when designating one.
What is Power of Attorney
Power of Attorney is a type of legal authorization that grants a person the ability to act as the agent of a principal. In non-legal terms, Power of Attorney allows a designated person (known as an “agent”) to make personal, financial, investment, or medical decisions on behalf of another (“principle”) in the event that that person becomes mentally incapacitated.
In most cases, Power of Attorney comes into effect when the principal is unable, due to incoherent or physical inability, to make decisions for themselves. For example, if a person develops dementia and is no longer able to make important financial decisions for themselves, the agent designated prior to the principle developing dementia can step in and make those important decisions for them.
When Power of Attorney comes into play is also based on what kind of power of attorney it is. “Springing” power of attorney, which is what was described above, only takes effect when the principal is no longer able to make decisions for themselves. “Durable” power of attorney begins immediately when the principal signs the document.
Things to Consider When Appointing a Power of Attorney
Look for the most Qualified Person
When appointing a power of attorney it’s important to take that person’s trustworthiness and ability to handle complex situations into consideration. While it can be tempting to appoint someone who “makes sense” relationally, such as a child or spouse, it’s important to not spare feelings. These are your finances, investments, and personal medical decisions on the line. If someone else – a relative, a friend, etc. – seems like a better fit, it’s a better idea to appoint that person.
Consider Having One Agent
Tying into this, it’s usually better to have a sole acting agent versus several people acting jointly. While it is possible to appointment several people, this can often make complicated situations worse by forcing different people with different ideas to come to an agreement about important medical, financial, or investment decisions. Having a sole acting agent can help streamline processes and allows decisions to be made in a timely manner.
Naming a backup
In the event that the agent you delegate isn’t fit to hold the Powers of Attorney that you have granted them, it’s important to name a backup agent when appointing a power of attorney. It’s a good idea to name a backup who is likely to be in good mental and physical health at the time you would need their service.
Specifying the Powers of the Agent
Another thing to keep in mind when appointing a Power of Attorney document is to be specific about the powers granted to the agent when the POA takes effect. This can be related to medical, real estate, investments, or other important decisions you are unable to make. It’s important to be as specific as possible to avoid ambiguity. For example, granting power of attorney the ability to handle real estate transactions for you, or allowing them to make medical care decisions on your behalf.
This all will depend on whether or not your wish to provide limited power of attorney or general power of attorney.
Limited power of attorney limits the powers of the agent to whatever is specifically dictated, be it real estate management, medical decisions, etc.. General power of attorney gives the agent access to all aspects of decision making, including medical, financial, real estate, and other.
Appointing a Power of Attorney
If you plan on appointing a Power of Attorney you must sign a legal document naming the agent and specify the matters you grant them the ability to act on your behalf for. The Revised Code of Washington 11.125.050 dictates the requirements of authorizing a power of attorney document.
It states that the document:
- Must be signed and dated by the principle, as well as notarized in the presence of two unaffiliated witnesses.
- Is considered authorized if it is marked by the principle if that principle is physically unable to sign their name in accordance with RCW 11.12.030, and that
- The signature of the principle is considered genuine when it is given in front of a notary and two witnesses.