When people create an estate plan for their future, they may choose to appoint a power of attorney as well. A power of attorney is an individual that may not always have a role in a person’s life but is able to step in and make necessary decisions for that person if they are unable to do so for themselves. Often times, people believe a power of attorney is only needed in the event that a person is dying and cannot communicate their desires. However, there are many reasons as to why a power of attorney may be needed in a person’s life.
Reasons for a Power of Attorney
There are many day-to-day life reasons as to why a person may need a power of attorney. This can include the following:
- Military Power of Attorney: Written and signed by a service member, this grants certain authority to a loved one to handle legal or financial matters in their absence. This may allow another individual to take possession or accept delivery of personal properties, manage housing and real estate transactions, operate motor vehicles in the service member’s name, perform banking transactions, file their taxes, and more.
- Business Power of Attorney: It is important for business owners to have long-term strategies. Many use an estate plan to take care of this so that transferring ownership and control are planned. In this case, a power of attorney can serve as an agent in the event that the business owner is unable to manage their business affairs.
- Real Estate Power of Attorney: This legal document allows a person the authority to buy or sell real estate for another individual. This may be if they are out of town or unavailable when the documents need to be signed, not around to look after their real estate for a period of time, or live far away from their property and wish for someone else to manage it in their absence.
General vs. Special Power of Attorney
When understanding what a power of attorney is and the different types available to people, it is also important to know the difference between a general and specific power of attorney. A general power of attorney gives broad authorizations to the individual. This person can make healthcare decisions, legal choices, financial, or business decisions. A special power of attorney gives an individual more of a narrow focus on the decisions they are able to make.
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