A power of attorney is a document that gives another person the authority to conduct personal or business transactions on your behalf. This person is referred to as the attorney-in-fact or agent. A power of attorney is useful when you cannot personally attend an event, such as a real estate closing, due to illness, military service or travel. By making a power of attorney durable, it will stay in place if you become mentally incapacitated, which can bring peace of mind to you and family members.
Consult an attorney to determine how to structure the power of attorney to best suit your needs. A general power of attorney is very broad and provides a large range of powers to your agent; these typically include most business transactions. A specialized power of attorney can allow your agent to handle specific situations like selling or managing property for you.
Choose your agent carefully. Some people select an attorney as a representative, but you can grant power of attorney to anyone, including a friend, spouse or other relative. You will want to be sure that the person you choose is trustworthy and capable of handling the fiduciary responsibilities that comes with having power of attorney. This means that the person will represent your best interests and not seek personal gain from transactions made on your behalf.
Submit a notarized copy of the power of attorney to each financial institution where you conduct business. This will be necessary if you plan to use a power of attorney to authorize an individual to enter or negotiate contracts, transfer or sell real property, apply for a loan or refinance an existing loan, or simply open and close bank accounts in your name. Ask each bank if any additional documentation is required from you or your agent to allow use of the power of attorney to conduct such transactions.
Consider using a power of attorney to permit another person to make medical decisions for you in the event that you become incapacitated. A health care power of attorney allows you to designate an agent who will have the authority to make health care decisions on your behalf if you are unable to make such decisions.