If you are new to creating estate planning documents, such as a power of attorney, the process can seem intimidating. Most people have very little experience creating or using powers of attorney. Even more, you might have heard some common myths surrounding power of attorney documents that are clouding your view of them. To help dispense of some of these myths and to give you a better understanding of what a power of attorney is, what it does, and how it can benefit you, let’s take a look at some of these common misperceptions.
Myth: A power of attorney does involves a lawyer.
When people hear the term “power of attorney” they quite naturally assume that it has something to do with attorneys. While it is true that, as a legal document, a power of attorney is something that you should only create with your lawyer, the document itself has nothing to do with attorneys or the practice of law.
A power of attorney is just a document that gives you the ability to name someone who can legally represent you and make decisions on your behalf. The term “attorney” in this sense simply means representative. When you create a power of attorney you don’t have to appoint a lawyer, don’t have to be a lawyer yourself, and don’t have to have any experience with the law.
Myth: Powers of attorney are dangerous because they give away your rights.
The representative you appoint under a power of attorney is called an agent. Agents have specific duties and authorities granted to them under the power of attorney. This means that once you name an agent, your agent can act on your behalf and make decisions. The decisions the agent makes will have the same legally binding effect as if you had made them yourself.
When people first learn of the powers granted under a power of attorney, they are naturally hesitant to give away their decision-making authority. Some people believe, for example, that by giving away power of attorney, they lose their right to make decisions. Others believe that if they name an agent, that agent will simply take advantage of them.
First, it’s important to understand that only a capable adult can grant power of attorney. Similarly, as a capable adult, you retain the right to revoke or amend the power of attorney whenever you like. This means you can fire your agent at any time. You aren’t giving away your decision-making rights, but are merely delegating them for as long as you deem appropriate.
Second, your agent will have a legal responsibility to do what is in your best interests. This means that if the agent tries to take advantage of you by abusing his or her powers, the law will impose some specific, and significant, penalties.