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The idea of ceding control over certain parts of someone’s life may not seem like an attractive idea, but there are some cases where it is best to have an individual ready to represent them. If an individual is unable to manage their own business affairs or finances, such as due to a medical issue, the court may end up appointing someone to do this, which means that an individual could end up with a person they’ve never met making important choices for them.
A power of attorney allows someone to select a trusted individual to make decisions for them in their stead. Powers of attorney can be limited, restricting the person selected to only do certain actions, such as making particular purchases or closing on the sale of a home. They can also be set up so that the person only has powers in certain situations, such as when someone is out of the country or medically unable to act for themselves.
Once someone is named in a power of attorney, they are considered an agent, or attorney-in-fact. In many situations, the person who has been named will need to provide the power of attorney to be able to act on someone’s behalf, such as when making real estate transactions or opening and closing bank accounts. However, it is generally not required for signing checks.
Whether someone needs to set up a power of attorney or any other estate planning document depends on their situation. A lawyer that specializes in estate administration may be able to help people understand how these documents work.