Power of Attorney
There could be a time when you become incapacitated and will need to appoint someone to make important legal, business, or medical decisions on your behalf. When you authorize a person to take on that responsibility, you are bestowing upon them what is called a “power of attorney.”
This is the legal process that takes place when an individual is authorized to make those important decisions for another. There are multiple reasons why you would require a power of attorney. It could be granted for a limited transaction and expire at a set time or once the transaction concludes.
Looking to grant a person power of attorney can be a confusing experience. You want to make sure that you select the correct person and that you follow all the proper steps so that the appointed person can executive their responsibilities without any problems. You should hire a New Jersey wills, trusts, and estates lawyer who can help you facilitate this process and create an estate plan.
What Is a Power of Attorney?
A power of attorney is a legal document that is created for the benefit of the principal, who is the person that is seeking the appointment, to the agent, who is the one who will receive the new authority. The agent has the authority to make the decisions of the principal. A power of attorney can cover a wide range of areas, such as financial, business, health care decisions, and personal life care matters.
There are four types of powers of attorney in New Jersey that allow for certain limits to be placed:
- General power of attorney: This is the most far reaching of the powers of attorney, and it allows the agent to make decisions pertaining to a variety of circumstances. It is important to note that given the authority the agent has, this type should not be used frequently. Another important aspect is that this authority will expire upon the death or incapacitation of the principal. In other words, this authority is only active while the principal is cognizant and aware of the authority they have given up.
- Durable power of attorney: This is the most common version of the power of attorney. It allows the agent to make medical decisions on your behalf if you are incapacitated.
- Limited power of attorney: This provides the agent with authority that covers only a specific transaction, such as a major purchase when you are not in the area. Traditionally, this authority will expire upon completion of the transaction.
- Springing power of attorney: This is authority that is not activated until an incident occurs, such as a medical event. This power of attorney protects you in the event something happens and provides you protection.
The timing on when a power of attorney takes effect depends upon the details of the agreement. Some become active when the principal becomes incapacitated. Some will take effect upon signature of the agreement.
Who Should Be Chosen as an Agent?
No matter who you select to serve as your agent, you must ensure that they will follow through on how you would have decided situations and not do it their way. In terms of the person you select, there are no restrictions.
Regardless of who you select, you should thoroughly vet them to guarantee that they are up for the responsibility. Among the tasks you will be expecting them to fulfill include:
- Respect your wishes.
- Not abuse their position.
- Keep accurate records.
- Give you or a third-party routine update.
Agents will not receive any compensation for their efforts although, they will retain a certain amount of liability for their actions. If there is any evidence of intentional misconduct, they could get in trouble. An agent will not have any legal problems if they simply make poor or inexperienced decisions.
In New Jersey, it is important to establish a power of attorney for yourself or a loved one because in the state, a husband does not have the legal authority to make decisions for his wife, nor can a wife make decisions for her husband. In addition, the state also does not grant the parent of a disabled adult child the legal authority to make decisions on behalf of that child. It is essential that you establish a power of attorney for your spouse or children ahead of time in case something occurs that prohibits them from making decisions on their own.
When determining who you will select as your agent, it is important to explain that in New Jersey, when finalizing the document, both the principal and agent must be of sound mind at the time of the signature. In addition, they must sign the documents before two witnesses and in the presence of a licensed notary in the State of New Jersey.
How Can a Lawyer Assist With a Power of Attorney?
When you decide that you want to create a power of attorney, a lawyer can help with the details. While it will be up to you to determine who you want to serve as your agent, a lawyer can help you with the signing of all documents by ensuring that the proper witnesses are in attendance along with the notary.
Given the variety in powers of attorney, it is important that when you sign your documents, they are done so correctly so that you can be assured that your needs are addressed. While you might be able to obtain forms on your own, you will benefit from having a lawyer present to give you the peace of mind that you are seeking.
Is Abuse Possible With a Power of Attorney?
Granting an agent power of attorney requires a tremendous amount of trust and confidence. You are giving this person significant authority over your health, financials, or other aspects of your life. There are cases where the agent has taken advantage of the situation.
There are specific laws in New Jersey that protect the rights of the principal. For instance, the law prohibits the agent from interpreting the language of the power of attorney to transfer the principal’s assets to that of the agent or anyone else unless the agreement expressly and specifically authorizes such a transfer. If this type of transfer happens, it will authorize the Superior Court to request documentations from the agent about the transfer with an explanation for why it has taken place.
There are certain cases of powers of attorney abuse that take place that no one even knows is occurring. An agent could be making inappropriate financial decisions and lying to family members. A person’s true abuse may not come to light until weeks or months after it took place.
Another concern is the method in which an agent was selected by the principal. Family members could be worried that the agent exerted undue influence over the principal to manipulate them into naming them as an agent. Once in that position, they can use their new authority to make major decisions pertaining to a person’s finances.
Instances of abuse is another reason why having a lawyer is important. A lawyer will be there to help execute any power of attorney and can help intercede if family members suspect that the agent has committed any type of misconduct or is not fulfilling the principal’s desires and wishes.
New Jersey Wills, Trusts, and Estates Lawyers at Herold Law Will Help You With a Power of Attorney
There may come a time in your life where you will need a family member or a friend to make major decisions on your behalf concerning your health or finances. Our New Jersey wills, trusts, and estates lawyers at Herold Law, P.A. can help you with these matters. Call us at 908-679-5011 or contact us online today to schedule an initial consultation. Located in Warren, New Jersey, we serve clients throughout the state.