There are many things people would rather do than talk about Power of Attorney. Like going to the dentist for a root canal or watching the paint slowly peel off the wall, for example. It’s not just that the topic is dry and full of legalese. The underlying message can also be painful because it forces you to think about a time when you or a loved one won’t always be as robust and capable as you are now.
When you’re young, those days may seem so far off into the future that they don’t matter anyway. However, the best time to talk about POA (Power of Attorney) is before something happens and you find yourself face to face with a critical decision at an emotional time. If you assign a POA now, it’s over and out of the way so you can go about your business. Plus, there are several benefits to taking care of this matter sooner rather than later. Let’s start by learning more about the different types of POA.
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POA Defined and Explained
Your POA is someone you legally appoint to handle any dicey situations you don’t want to deal with or can no longer do yourself. Traditionally, A POA is reserved for an older person or someone with disabilities or other challenges.
For example, when downsizing, an elderly parent might rely on their adult children or another relative to sell their family home. Likewise, they might want someone to handle the purchase of a new property for them. A POA means that a relative can sign the required paperwork to finalize the transaction without directly involving the owner.
However, it isn’t just about age, and it isn’t just about real estate. Life is unpredictable. We don’t like to think about it, but accidents and illnesses can happen to anyone. In the worst case scenario, having someone you trust available to take care of your personal and financial matters can help to provide comfort and peace of mind.
Looking for resources to help you buy real estate in a changing market? The informative posts below can help:
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Types of POA
POA can fall under two categories:
- Power of Attorney for Personal Care: In this case, a trusted family member or friend steps in to make decisions regarding your healthcare.
- Power of Attorney for Financial Matters: This allows someone else to handle your finances and investments on your behalf. And if you ever want someone to buy or sell a house for you, POA for Financial Matters is what you’ll need.
Power of Attorney for Financial Matters can also be further broken down into two types:
- General Power of Attorney: This is a legal document that allows your POA to manage your finances when you are still capable of handling your own affairs. If you become disabled, the contract ends. You can also sign a General POA to start and end on a specific date, as well as limit their authority. You might choose this type of POA if you are going to be temporarily out of the country or are too busy to take care of your day to day legal affairs.
- Enduring Power of Attorney: This authority can take effect immediately after signing or on a specific date and endures in the event that you become incapable of handling your own financial matters.
What Are the Advantages of Assigning a POA Now?
Knowing everything will be taken care of if you become incapacitated provides clarity and peace of mind not just for you, but for your family and loved ones. Everyone knows your wishes, which leads to less heartbreak and confusion at a time when emotions are already running high.
- Assigning POA early allows you to appoint someone you know will keep calm in the face of pressure and have the attention to detail to ensure all financial matters are handled correctly.
- You will avoid any involvement from the courts. This alone might be the biggest reason to appoint a POA you trust sooner rather than later. Without this document in place, it might be the courts making decisions on your behalf should you no longer be able to do so.
- You can weigh your decisions carefully when you’re not under pressure. Appointing a POA well in advance means there is no urgency or duress, and you’ll have time to customize the document and define the scope of authority.
Has someone assigned you as their POA to help them sell their family home? The resources below will help you achieve a seamless transaction:
- What to Expect When Selling a House in Today’s Market
- How to Choose a Real Estate Agent to Help Sell Your Home
What Are the Risks of Assigning a POA?
Like all financial decisions, assigning a Power of Attorney does come with some risks. Measures are in place to protect you from incompetence and abuse, and your POA is legally required to act in your best interest. For example, your Attorney cannot transfer your money into their own bank account without your written instructions. However, what is in “your interest” might be up for debate. Before signing a legal document, you and your POA must be clear on what your wishes are and how they should be executed when the time arrives. The following tips will help you choose a trustworthy POA who will safeguard your interests.
- Work with a lawyer to ensure you know your rights and what authority you still have after signing the document.
- Remember that your POA is required by law to follow your instructions in the agreement. It’s essential to ensure your directives are crystal clear, but not so restrictive that your POA is prevented from taking action.
- If you assign more than one POA, be sure that each role is clearly defined.
- Remember to review and update your POA document regularly to be sure that the person you appoint is still willing and able to perform their duties.
Your Rights After Appointing a POA
Assigning a POA can feel like a terrifying step because it means granting another person a lot of power. It’s a decision to make only after careful deliberation. Still, there is no need to agonize over it. Granting POA may feel like you’re signing your life away, but you’re not.
Remember that giving someone else authority to act doesn’t mean you lose your autonomy over your life. You are free to make your own decisions as long as you are able. One of those choices is to change or even revoke POA as you see fit. As long as you make a careful and informed decision, assigning a Power of Attorney is a great way to ensure your interests are protected now and in the years to come.
Do you have questions about real estate in Halton or the GTA? With over 20 years in the industry, I have seen it all and am happy to share my insights with you. Reach out today at firstname.lastname@example.org or call 416.884.7925 for more information.
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