A power of attorney grants one person or more the right to act on behalf of the principal granting the power, and it can work in a number of different ways according to the needs or desires of the principal. New Jersey residents may need a power of attorney for one event or for long-term decision-making abilities.
Those given a power of attorney are called agents or attorneys-in-fact, and can act as allowed by the document. Agents may be in charge of buying or selling property like real estate or vehicles and could oversee bank accounts, but they must usually present the document when representing a person in these matters. Agents can also sign checks on one’s behalf and might not need to present the power of attorney when doing so.
Appointing an agent could become necessary when the principal is aging or losing faculties and is no longer able to act for oneself when managing business or personal affairs. Selecting an agent gives one more control of who can make decisions and allows a person to set limits and define the scope of an agent’s authority. This is often preferable to a court intervention where a court appoints someone on a person’s behalf if he or she can no longer make the choice. Commonly, a person chooses a spouse or a child as an agent, but anyone older than 18 and not incapacitated could serve as an agent.
A power of attorney can in some cases be an important part of an overall estate plan, and having one in place is one way to ensure that the principal’s wishes are carried out in the event of incapacity. An estate planning attorney can help a client prepare one that is in accordance with state law requirements.
Source: American Bar Association , “Power of Attorney“, December 17, 2014