Power of attorney is a term used often in the world of elder law and financial planning. Although a power of attorney isn't something everyone will utilize, it is important to understand the difference between and benefits of special power of attorney compared to a general financial power of attorney.
Dictionary.com defines a financial power of attorney as “a legal document giving one person (called an ‘agent' or ‘attorney-in-fact') the power to act for another person (the principal). The agent can have broad legal authority or limited authority to make legal decisions about the principal's property and finance. The power of attorney is frequently used in the event of a principal's illness or disability, or when the principal can't be present to sign necessary legal documents for financial transactions.”
On the other hand, a special power of attorney is defined as “a power of attorney authorizing the agent to carry out a particular business transaction for the principal.”
A general financial power of attorney gives all power of your estate and financial decisions to a trusted individual. It is wise to create a power of attorney along with your will or trust, even if you never use it. A special power of attorney, though, only takes authority in specific cases, such as a business transaction.
For example, let's say you are in the process of purchasing a home but can't sign all the real estate papers because you purchased a non-refundable European vacation a year ago. Assigning a special power of attorney would allow the agent to sign the papers for you.
Providing for a special power of attorney can be very beneficial and a wise financial tool to utilize, but you must set clear parameters of the duties of the agent. Clearly define who the agent is, what they are to do, and when their duties cease.
If you would like more information concerning powers of attorney, contact Antelope Valley estate planning law firm Thompson Von Tungeln (TVT) at (661) 426-2499 or visit their website at www.EstatePlanningSpecialists.com. EstatePlanningSpecialists.com is a comprehensive online resource for personal wealth management solutions through wills and revocable trusts. As Board Certified Specialists in Estate Planning, Trusts and Probate as certified by the State Bar of California Board of Legal Specialization, partners Mark E. Thompson and Kevin L. Von Tungeln are expertly equipped to serve clients with the creative, effective and custom solutions they demand.