The Power of Attorney (POA) is a legal statement that gives a lawyer authority to act on behalf of their client, in case the individual is absent to close a deal for whichever reason.
Sometimes, a person might be unable to follow through with certain undertakings such as selling a house, brokering a company merger or settling claims. In such circumstances, the attorney can act as their agent by signing the necessary documents and completing other personal requirements needed to finalize the transaction.
How does it apply?
The power of attorney is applicable once two witnesses have been called to witness the legal privilege being exchanged from the client to his/her lawyer. You can either give your attorney powers to act on your behalf while still conscious, or put it such that the arrangement is only applicable when you become unconscious or unable to make decisions by yourself.
Types of Power of Attorney documents:
- I) General
This contract gives broad privileges to the lawyer to represent you in matters such as; handling business transactions, purchasing life insurance, fulfilling business interests and outsourcing professional assistance. Typically, this document is useful when you have traveled out of the country, but need someone who can take care of your matters while absent. Likewise, when you’re mentally or physically incapacitated it can also be helpful.
- II) Special Powers
In this arrangement, the client specifies exactly what powers the lawyer is supposed to exercise on their behalf, so that they don’t cover each and every aspect of your business even those they aren’t supposed to. Usually, special privileges are given to attorneys when the client is unable to handle certain responsibilities due to commitments or poor health. They cover matters such as administering real estate, collecting debts and selling personal property.
As the name suggests, a durable power of attorney document is intended to last and isn’t affected by temporary circumstances. For instance, if you become permanently incapacitated due to an illness or accident such that you can’t transact your businesses normally like you previously used to, then the attorney may legally take over from you and keep your operations running for your entire lifetime.
For a Durable plan to be put in place, you must specify in your contract that the attorney is only allowed to transact business on your behalf if you’ve been declared mentally/physically unfit by a doctor. Sometimes, it may even require a written statement by at least 2 licensed practitioners to declare you incompetent in terms of health to run your operations.
- IV) Health Care
A health care POA gives your lawyer authority to undertake medical decisions on your behalf, in the event that you’re unconscious or mentally unfit. For instance, the attorney can determine which hospital the patient should get treatment in when they become unconscious, the amount of money to be spent on treatment and so forth.
To summarize, the Power of Attorney is a binding contract that gives a lawyer authority to transact their client’s businesses, in the unlikely event that they’re unable to do so themselves. Generally, there are different types of POA documents and each has its own specific role which the attorney needs to fulfill. Read this comparison of Legalzoom vs Legalshield to select the best legal service for your power of attorney.