What Is a "Power of Attorney"?

One of the most important estate planning tools used by Florida estate planning lawyers is the "power of attorney." One of the reasons for preparing a power of attorney is anticipating a time when you may be physically or mentally incapable of handling your own affairs.

A power of attorney allows you to appoint a person you trust to do things for you, such as pay bills, buy or sell property, employ professionals such as accountants, or transact other business matters.

Disability is not the only reason to have a power of attorney. They can be set up to take effect when you are disabled (this is the most common, or to end when you are disabled, or they can be set up to begin and end with no regard to your (the "principal's") ability or disability.

A power of attorney that continues while you are disabled/incapacitated is called a...

"durable power of attorney."

The way the power of attorney is set up is important. The wording must be exact in order to define what the "attorney in fact" can and cannot do. Here are some of the things the attorney in fact cannot do, unless specifically provided for:

• Make gifts (except fulfilling pledges to charity)
• Exercise powers over money the principal has placed in a trust
• Change the terms of life insurance policies
• Change the beneficiaries of life insurance policies
• Change the rights of people who jointly own property with the principal
• Renounce money or property given to the principal as a gift, or through inheritance
• Make decisions about medical treatment for the principal

Source: The Tennesseean "Put 'power of attorney' only in hands you trust" June 22, 2010