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POWER OF ATTORNEY

A power of attorney is a document by which you (as the principal) appoint an agent with authority to act on your behalf, as to non-medical issues, for the duration of your life, or until you cancel the power of attorney.

You can consider whether you should  give someone in your family or a close friend, whom you trust, authority to handle your finances, so that if you became mentally disabled that person can pay your bills and handle your money.  You might need the agent to handle your affairs only temporarily until you recover from some illness or accident, or you may need the agent's help indefinitely.

A power of attorney ends upon your death. 
Then your estate planning takes over.  The estate planning might be a Last Will and Testament, a Trust or Joint Ownership of property or In Trust For accounts. 

WHAT ARE THE DANGERS OF APPOINTING AN AGENT?

This is not something to do lightly since it gives the agent a great deal of authority.   You must be positive of your absolute trust in your agent or you could risk becoming a victim of theft or fraud.
The agent can take charge of the principal’s assets and if the agent is not acting properly can steal the principal’s assets or use them in ways that the principal would not want.  To choose the wrong agent could be one of the most disastrous decisions a person could make.  In that case, it would be better to have a court-appointed guardian.

TYPES OF POWERS OF ATTORNEY:

WHEN EFFECTIVE:
Some are immediately effective and others become effective only upon proof of some definable event that the principal devises and puts into the document. 

WHAT POWERS TO DELEGATE?
If you decide to delegate the authority, we can consider which powers you want to delegate to your agent.

Each power of attorney has different powers.  Here are some  examples of issues that you may consider whether to give or withhold:

Payment of your insurance bills;
Military benefits;
Sale of your house;
Management of your bank accounts and stocks, investment decisions, and payment of your bills;
Pension decisions, choice of options;
File your tax returns;
Authority over certain medical records;
Authority to deal with the Department of Motor Vehicles;
Care of your companion animals;
Revocation of prior powers of attorney;
Hiring and payment for household care givers, companions, housekeepers, and related insurance and tax issues;
Determination as to where you reside if you are not competent enought to decide it;
Gifting of your assets in accordance with your wishes to family or charities; and the right to file gift tax return;
Estate planning for your assets after your lifetime;
The formation, operation, modification or closing of trusts of various kinds for specific purposes;
Medicaid planning done in compliance with the law;
Decisions as to inheritances you receive;
Personal care contracts;
Compliance with Medicaid requirements for coverage;
Purchase of an irrevocable annuity, or promissory note;
To borrow funds to avoid forced liquidation of my assets;
Power to deal with my debts;
Power to apply for government entitlements such as Medicare, Medicaid and SSI, and power to litigate or settle any such matter.

WHAT HAPPENS IF YOU HAVE NOT APPOINTED AN AGENT?

If you decide not to appoint an agent, and the time ever comes that you cannot handle your own affairs, someone can bring a court proceeding to have a guardian appointed by the judge.  The Supreme Court can conduct a guardianship proceeding and appoint a person to make decisions for you and protect you.  The judge will then require annual accounts and try to supervise your situation.