Saturday, November 27, 2010

Understanding a Financial Power of Attorney

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A financial power of attorney (or POA) is giving another person or agent the authority to make financial decisions on their behalf. Normally, people get nervous over this thought. However, a person can assess the need of a financial power of attorneybased on his current lifestyle.
In doing this, there are valid reasons to consider for an issuance of a POA. A need must be determined before doing this. It must be noted that a power of attorney is a legal document that allows someone to conduct/implement business on your behalf. Therefore, confidence and trust to the person issued a power of attorney must be ensured. A power of attorney may come in as financial and medical.
A medical power of attorney must be have a specific information on who can make medical decisions in times that someone becomes incapacitated. During times of incapacity, this person will make decisions for you as you not able to make valid decisions for yourself. However, experts advise that financial powers of attorney should not include medical information.
On the other hand, a financial POA has two types, the durable and the non-durable. The difference of these two types of power of attorney must be very clear to the person doing this. In most cases, people use the durable powers of attorney in the event that a chronic illness is being involved or the future when it will be foreseen that such illness can be disruptive to the person. Regardless of what purpose there is, a person must ensure his security before issuing a POA.

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