I. Overview of a Power of Attorney

 

A Power of Attorney is a legal document giving power to another person to access your finances and make decisions about your money and assets.  The maker of the Power of Attorney is called the “principle,” the recipient is called the “agent,” and the person or institution with whom the agent has dealings on behalf of the principle (e.g., bank, doctor, buyer of property, realtor, etc.) is called the “third party.”

 

An agent is granted the right to perform acts on behalf of the principal under either a:

 

• Limited Power of Attorney, or

• Durable Power of Attorney

 

A limited power of attorney is commonly used in real estate transactions when you are going to be out of the country or in another state during the day you wish to purchase the property. A limited power of attorney gives your agent the ability to sign your closing documents and can be specific to purchase a certain property, a property within a certain price range and sign mortgage documents up to a certain amount. These powers are usually limited for a certain period of time.

 

A durable power of attorney gives your agent as many powers as you wish, that range from the ability to make transfers and deposits in and out of your bank account, make investment decisions on your behalf to purchasing or selling property on your behalf. Therefore, you must trust the person you are giving this power to. A durable power of attorney gives power to your agent the day you sign this document even if you are fully competent and able to communicate your wishes and make these decisions for yourself.

 

II.  Healthcare Power of Attorney a/k/a Healthcare Surrogate

 

A healthcare power of attorney (also known as "Healthcare Surrogate") is crucial if you are ever unable to consent to health care treatment decisions.  The Healthcare Surrogate informs doctors, nurses, and hospitals of the name and contact information of the person chosen by you to make your healthcare decisions for you.

 

A Healthcare Surrogate allows your representative to make medical treatment decisions at any time you're unable to do so on your own. It's important to know that it differs from a Living Will.

 

A Healthcare Surrogate may be especially crucial for the elderly or anyone with a disease or condition that might limit his, her, or their ability to communicate with their healthcare providers. Medical care providers often request these documents, so they may be sure to meet the patient's choices for healthcare.