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  • Writer's pictureAlexander J. Kemeny

What is a Power of Attorney and When Is It Used

A power of attorney ( “POA”) is a written document by which another person or people known as “agents” or “attorney-in-facts” may be authorized to act on your behalf. A POA is often used to plan for situations where incapacitation might occur. A power of attorney can grant authority to a trusted friend or family member to act in your place. The appointed person's decision-making authority can range be broad or very limited.

This authorization is crucial in instances of illness, disability, or when your physical presence is impractical for signing legal documents. Without a POA, no one can act in your place as your agent unless they are appointed by a court.

Power of Attorney

There are four types of power of attorney: general, limited, durable, and springing.

General Power of Attorney. A general power of attorney endows your agent with nearly all of the same powers and rights as you possess. This includes managing bank accounts, writing checks, and overseeing the sale of assets. However, there are certain restrictions.

For instance, your agent cannot revise your estate plans.

Limited Power of Attorney. A limited power of attorney confines the authorized person's power to specific actions, such as signing property deeds or checks on your behalf.

Durable Power of Attorney. A durable POA empowers the chosen individual to make decisions immediately and persists even if you become incapacitated. It continues to be effective even if you lose the ability to comprehend the purpose of the POA after its signing.

Springing Power of Attorney. A springing power of attorney allows the agent to act on your behalf only upon your incapacitation. While many POAs take effect immediately, a springing POA delays activation until a specified event, such as your incapacity.

To be valid, a power of attorney executed in New Jersey must be in writing, duly signed and acknowledged before a notary or someone authorized to take oaths. The person signing the POA must also have the capacity to understand the decision to appoint an agent. You may revoke a POA so long as you retain capacity to do so.

The authority granted by a power of attorney ceases upon the agent's awareness of your death. Subsequently, the appointment of an executor or administrator for your estate is typically necessary.

A power of attorney is an important estate planning tool that is used to plan for the possibility that you may one day lose the ability to make decisions for yourself. It can also be used in limited contexts, for instance when you anticipate being out of the country, unavailable, or otherwise not readily able to certain actions directly and would like someone else to have the ability to act in your place.

The attorneys at Kemeny, Ramp & Renaud, LLC are available to assist you. Call us at (732) 853-1725 to schedule a consultation.


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