Be Careful Who You Grant Power of Attorney To!

Do you really know what it means to grant someone power of attorney? If you don’t, that’s perfectly fine. Let’s start with the original definition and expand outward, shall we? Great!

You see, a power of attorney is merely a document that gives someone (or even a group of people, if you really want them to have that type of control) the ability to act on your behalf, supposedly for your best interests. The person doesn’t even have to be an attorney, merely someone that you trust to make property, financial, and other types of legal decisions on your behalf.

Now, you might think that this would be harmless thing. After all, anyone that you trust enough to grant power of attorney would never abuse it, right?

Wrong. The truth is that a lot of people have been burned by having their attorney-in-fact (the person with the POA powers) make bad decisions. It’s something that causes a lot of grief, and that’s why it’s so important to really understand what a power of attorney means in a realistic sense.

When you give someone POA, you’re giving them a lot of control to make just about any type of legal decision on your behalf that they want. You’re trusting that they will do the right thing, but the sad part is that you really don’t have any guarantee. If you’re incapacitated and you cannot articulate your desires, you have to trust the person with POA will make the right decision. Yet there have been numerous examples where this hasn’t happened. If you don’t want a piece of property sold but the POA person gains something from selling it, you can believe that there is a danger of that property being sold — without any clear punishment for disregarding your personal wishes. It’s all about what’s in writing, which leads us to our next point — you can make sure that you stay protected even when giving POA.

The type of POA most people go with is called a durable power of attorney, which means that it stays in effect until you yank it back or you pass away. This is the most dangerous type of POA because it puts no type of limit on what the assigned person can do and what they can’t do. Trying to limit someone after they’ve gotten this type of power is very difficult. This means that you will want to go with something nondurable, which means that it has a special list of abilities and nothing more.

Let’s cover that one more time: a nondurable power of attorney gives your specified person specified powers and a specific purpose to use it with. If you’re trying to only get someone to handle your financial affairs while you’re outside the country and you have a set date where such powers expire, then a nondurable POA is what you want. You don’t want to go with a durable POA, as this means that the person handling your financials can continue to do so long after you’ve finished with that shiny international vacation!

Another thing that you can build into your POA is accountability. In its raw form, the standard POA doesn’t require any type of accounting. You can improve this simply by including the clause, and letting the other person know as well. Generally speaking, when people realize that you’re monitoring them, they are a lot less likely to push the envelope and cause financial and legal damage.

Overall, having a POA is a good thing to have, as long as you understand the true meaning of such a thing. Pay close attention to the considerations in this guide, and you’ll be just fine!