It is important for everyone to give someone they trust the power of attorney – even if you’re young. If you’re incapacitated for any reason, it will be a nightmare for your family and loved ones to help with even simple tasks like pay your mortgage if you have not provided power of attorney to someone.

What is power of attorney?

A power of attorney is a legal document that you sign to give someone (or multiple people) the authority to manage your financial matters – including property. 

The person you appoint as your POA does not actually need to be a lawyer. It can be anyone over the age of majority.

What does it mean to have power of attorney?

The person you appoint as your POA can do almost anything you can do with your finances and property. 

When you set up the POA document, it is important for you to decide whether the attorney’s power should be limited in any areas. Note that your attorney does not actually own any of your money or property. They only have the authority to manage it on your behalf.

If someone has given you their power of attorney, then you’ll need to review their signed document to determine what you are allowed to do.

When does power of attorney come into effect?

If you’re giving someone power of attorney, then you have broad discretion with regards to when it comes into effect.

For example, the POA can come into effect immediately upon signing the document. Alternatively, the POA can come into effect only when a certain set of conditions are met. The most common condition is medical professionals declaring that you are incapacitated. 

You can also give multiple people power of attorney. They can be structured such that multiple attorneys have to agree before a course of action is taken, or you can have a list of attorneys where the POA moves down the list if your first choice is unable or unwilling to be your attorney.

What’s the difference between power of attorney and personal directive?

Power of attorney (POA) relates to financial matters and personal directive (PD) relates to personal choices such as healthcare.

For example, your attorney cannot make the decision to take you off life support but an appointed agent from your personal directive can.

Your personal directive would include your wishes in certain medical situations, and give someone the authority (or multiple people) to make medical decisions that are not explicitly stated in your directive.

For advice on power of attorney, personal directive, and wills you should contact a local lawyer as they will be familiar with the applicable laws in your region.

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