When talking about legal concepts, there are few notions that can be as bewildering as a general power of attorney. Whether you’re starting your own business, or you are looking to protect your interests and assets, having a proper understanding of what this type of legal document is, and more importantly, why it is needed, are key.
What Is a General Power of Attorney?
A General Power of Attorney (GPA) is a legal document that is used to authorize an individual to act on behalf of, and at the request of, another person or organization. This document is legally binding and grants that individual the right to sign documents, manage finances, and conduct business on behalf of the other person or organization. In essence, a GPA gives power and legal authority to the person to act as an agent for the grantor.
When Is a General Power of Attorney Needed?
A GPA is typically used when the grantor is unable to perform certain legal tasks, such as signing documents or making financial decisions. This could be due to a number of reasons, such as physical or mental disability, illness, or other life circumstances. In addition, a GPA may also be used when the grantor is away on travel and unable to perform their duties or if they would like to delegate certain responsibilities such as conducting business or executing contracts.
The Importance of Being Specific
When creating a GPA, it is important to be as specific as possible. While a general document gives broad, sweeping powers to the grantee, it can also inadvertently lead to conflicts. To avoid such situations, ensure that the document is as detailed as possible. Instead of granting broad powers, try and limit the coverage and scope of the agreement. Additionally, it is important that both parties understand the legal implications of the agreement and what the document entails.
Conclusion
Every business should be aware of the power and potential of a General Power of Attorney. While this document can have great potential, it is important to understand that it is a legally binding document and should be used with caution. Always ensure that both signees understand the document and its implications, and go into as much detail as possible to avoid any disputes down the line.