Power of Attorney is a document that gives someone else the legal authority to act on your behalf and make decisions on your behalf. It can be a valuable tool in a variety of situations, and it is important to understand what this document entails and the legal ramifications of granting someone else power of attorney.
Types of Power of Attorney Agreements
The two main types of Power of Attorney are durable and non-durable. Durable Power of Attorney is a document that remains in effect even when the individual granting the power becomes incapacitated, such as due to health issues, while a non-durable Power of Attorney terminates upon the grantor’s incapacity. Additionally, Power of Attorney can be either general (giving broad control and authority) or limited (addressing specific matters).
Using Power of Attorney in Business
Businesses can use Power of Attorney when a key decision-maker or owner is abroad, absent, or otherwise unavailable to make decisions or sign important documents. Giving someone else the authority to act on your behalf and make decisions in your stead can be beneficial for day-to-day operations or in special circumstances. For example, a parent could grant Power of Attorney to their child so they can handle their legal and financial affairs when they are gone on a long business trip.
Implications of Signing a Power of Attorney
When granting someone else Power of Attorney, there are important implications to consider including, but not limited to, any legal obligation the grantee may incur and any potential legal liability that may arise from granting such power. It is vitally important to understand exactly what you are signing when you grant someone else Power of Attorney and the extent of their authority. Additionally, it is important to verify the identity of the person you are signing with and to have the document reviewed and signed by counsel.