A power of attorney contract could make things easier for someone who may have trouble managing his or her finances and other affairs. When someone, legally referred to as the “principal,” names another person an attorney-in-fact through a power of attorney document, the principal grants many authorities to that other person. Estate planners may find that signing a power of attorney document is less costly and taxing than relying on New Jersey courts to appoint a guardian if someone becomes incapacitated.
The value of appointing an attorney-in-fact
A power of attorney designation allows a trustworthy agent to handle the principal’s affairs. POA documents allows the agent to act on an individual’s behalf in many ways. He or she could file tax returns, invest money, pay bills and more. A power of attorney has the legal authority to withdraw money and sell assets, so choosing an honest person is advisable.
Anyone who experiences health issues or otherwise runs into trouble managing various responsibilities may award someone POA status. An effective agent could then keep the principal’s estate in order.
Limitations to POA designations
A few points are worth noting about the limitations of any power of attorney designations. Most importantly, power of attorney ends when the principal passes away. After the person dies, the document ceases to exist legally. To handle any affairs on the principal’s behalf, the probate court appoints an executor of the estate. A will commonly designates an executor, but the court decides if there is no will. This is one reason why writing a will is wise for anyone taking part in estate planning.
Power of attorney designations do not cover health care matters, though. A living will or a health care proxy suffices in such situations. An attorney may assist with the process or writing these documents as well as a POA designation.