Types of Powers of Attorney
Powers of attorney can be of short duration and for specific purposes, giving your agent the authority to act for you one time in a particular business transaction such as the sale of a house or vehicle. Often, however, power-of-attorney documents -- termed durable powers of attorney -- are intended to give someone authority to act for you if health issues prevent you from acting for yourself. While a regular power of attorney expires when you die or become incapacitated, a durable power of attorney remains in effect during your period of incapacitation.
Financial or Medical
When you make a durable power of attorney, you name a trusted individual as your agent to make financial or health care decisions on your behalf. You can choose to make the power of attorney effective immediately or at such time as a doctor declares you incapacitated. The agent named in a financial power of attorney pays your bills, oversees your bank accounts and investments, collects insurance benefits, or other revenue in your name, and generally assumes all money matters on your behalf. The agent named in a power of attorney for health care makes only medical decisions for you. While you need to sign the power of attorney in all states, your agent's signature is not universally required.
Drafting the Documents
Check with your local court before you begin drafting a power of attorney form because the exact requirements -- including required signatures and witnesses -- vary among jurisdictions. Many states offer forms to their residents that meet that state's legal requirements, including signature spaces for required signatures; similar forms may be available from financial institutions and from reputable online legal services providers. An attorney also can prepare the form for you. Once you obtain the form, the critical part is getting all of required signatures.
A power of attorney confers such sweeping authority that states have an interest in safeguarding the process to prevent fraud. Some states require that the principal's signature be made before a notary, others require witness signatures, and those that have passed the Uniform Power of Attorney Act require a notary and two witnesses.
Whether an agent's signature is necessary to validate a power of attorney varies among states. Some states like Vermont require the agent to sign the document, and sometimes the agent's signature must be notarized. An agent's signature is not required under the Uniform Power of Attorney Act. In some states like California, power of attorney forms contain a signature space for the agent's acknowledgment and acceptance, but the legislative code in that state only requires the principal's signature for the document to be valid. The agent's signature in California is voluntary. Even if your state does not require that the agent sign the power of attorney, it makes sense to inform the person you name that she has been chosen to serve as your agent and obtain her written agreement. You can list several alternative agents in the power of attorney in case your first choice agent decides not to serve or becomes unable to serve.