POWER OF ATTORNEYS is a legal instrument that is used to delegate legal authority to another. The person who signs a Power of Attorney is called the Principal. The power of Attorney gives legal authority to another person, called an Agent or Attorney-in-Fact, to make property, financial and other legal decisions for the Principal.

A Principal can give an Agent broad legal authority or can limit authority. The Power of Attorney is frequently used to when the Principal is ill or disabled, or in legal transactions where the Principal cannot be present to sign necessary legal documents.

Formal Requirements for a Power of Attorney:

You must be mentally competent when you sign a Power of Attorney. This means that you must understand the powers that you are granting to your agent and the implications of having someone else make decisions for you. It must signed by you, the Principal, and notarized. In some instances a Power of Attorney is filed with court or other government agency, i.e. Power of Attorneys authorizing an agent to conduct the buying or selling of real property.

Different Types of Powers of Attorney:

Nondurable Power of Attorney takes effect immediately and remains in effect until it is revoked by the Principal, the Principal becomes mentally incompetent or the Principal dies. It is typically used for a specific transaction, like the closing on the sale of residence or the handling of the Principal's financial affairs while the Principal is unavailable for various reasons.

Durable Power of Attorney enables the Agent to act for the Principal even after the Principal is mentally incompetent or physically unable to make decisions. The "Durable" Power of Attorney may be used immediately, and is effective until it is revoked by the Principal, or until the Principal's death. State law requires that the "Durable" Power of Attorney form have the title: Durable Power of Attorney, New York Statutory Short Form.

Springing Power of Attorney becomes effective at a future time, it "springs up" upon the happenings of a specific event chosen by the Principal. Those events usually include either the illness or disability of the Principal. A "Springing" Power of Attorney remains in effect until the Principal's death, or until revoked by a court.

"Durable" and "Springing" Powers of Attorney are frequently used to plan for a Principal's future incapacity or disability and loss of competence resulting, for example, from Alzheimer's Disease. A "Nondurable" Power of Attorney, on the other hand, enables a Principal to decide in advance who will make important financial and business decisions in the future.

They are also helpful in avoiding the expense of having a court appoint a Guardian to handle the Principal's affairs in the event of incompetence or disability.

Types of Powers Granted in Powers of Attorney:

• Buy or sell real estate
• Manage property
• Conduct banking transactions
• Invest or not invest money
• Make legal claims and conduct litigation
• Attend to tax and retirement matters
• Make gifts on the principal's behalf

Choosing an Agent:

You should choose a trusted family member, a proven friend, or a professional with an outstanding reputation for honesty. You should not allow anyone to force you into signing a Power of Attorney. The agent named in a Power of Attorney is your representative so as long as you have the legal capacity to make decisions, you can direct your agent to do only those things that you want them to do.

What are an Agent's Obligations to a Principal?

The agent is obligated to act in the best interests of the Principal, and to avoid any misappropriations or misconduct that serves the agent and not the principal. An agent is a "fiduciary", with strict standards of honesty, loyalty and candor to the principal. An agent must safeguard the Principal's property, and keep it separate from the agent's personal property. Money should be kept in a separate bank account for the benefit of the Principal. Agents must also keep accurate financial records of their activities, and provide complete and periodic accountings for all money and property coming into their possession. Be sure to request that your agent that you want accurate records of all transactions completed for you, and to give you periodic accountings. And if they fail to do any of these you may revoke your Power of Attorney at any time. You should inform your agent, in writing, that you are revoking the Power of Attorney and request the return of all copies of your Power of Attorney. Also, you should notify your bank or other financial institution where your agent has used the Power of Attorney.

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