Power of Attorney
A power of attorney is a powerful tool in the estate planning toolbox.
Simple question, complex answer.
Mike is buying a house, but is a traveling salesman. He cannot make it to the closing, so signs a paper allowing his brother to sign at closing on his behalf. That is a sample of a power of attorney. In this case it is specific and temporary.
A power of attorney (POA) is giving somebody else the authority to make legal and financial decisions for you, preferably in writing, witnessed, and notarized.
Everybody over the age of 18 should have a trusted backup person who can make decisions.
A POA can be durable or temporary. A POA can be for a specific purpose, as in Mike’s situation, or general in nature. A POA can be completely custom written, or based on the forms in the state statutes.
In estate planning, the preference is for a Durable Power of Attorney. Durable means that it will not stop working if you become mentally incapacitated, that is unable to make your own decisions.
The preference is also for the POA to become effective immediately.