Power of attorney is a legal document by which one person is empowered to manage the assets and financial affairs of a live person. The appointment must be made when the person is of sound mind. The attorney must sign an acceptance of the appointment. The attorney is not entitled to exercise his powers for his own benefit. A power of attorney ceases when the donor dies. The executor named in the will will take over the responsibilities of the estates.
Examples of power of attorney:
General power of attorney
A general power of attorney continues to function only when the donor is of sound mind. This is useful if one is going overseas for an extended period of time.
Enduring power of attorney
An enduring power of attorney continues to operate even if one become of unsound mind due to disability or illness. This allows the attorney to continue managing the affairs even though one is unable to make rational decisions.
Sleeping power of attorneyThe attorney may be appointed but the time for him to act might be delayed. The attorney may act on written request either immediately or at later date.
Substitute power of attorney
To safe assets in the event that the attorney passed away or is made a bankrupt, it is wise to consider the appointment of a substitute. The substitute will then be able to take over.