What is a Power of Attorney?
- Signing a power of attorney gives someone authority to handle your affairs, and a standard power of attorney includes specific lists of powers from which to choose. For instance, an individual with power of attorney over your bank account will be authorized to pay bills and write checks, but not to sell your house – unless you give them that power.
- It is very common for spouses to give powers of attorney to each other because of today’s confidentiality. For example, if the cable bill is in the husband’s name, the cable company just won’t talk to the wife.
- If you need to handle matters for your elderly parents, you’ll need a power of attorney because it makes it easier for people to help others.’ If you’re sick and need help but don’t have one, it’s very difficult for people to assist you in handling your affairs.
- A certain amount of abuse formerly took place when some general language authorized a certain amount of annual gift giving – usually tied to the gift tax and annual exclusions. If you want to allow the giving of gifts, include a major gift tax rider, a second document the legislature has established to curtail abuse. The most important factor in granting a power of attorney is choosing a person you can trust and about whom you have no reservations.
- A person must be competent to grant a power of attorney. Otherwise, they can neither issue nor revoke one.