In this article, we’re sharing a POA meaning, the steps to set up a Power of Attorney, and the power granted to a PO in a few of the most popular circumstances.
We will also be answering common questions that we receive about POAs below.
This article is part of our free series on banking, estate planning, and wealth management, including a free detailed guide to opening a private bank account for yourself and your family members.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- POA Meaning
- How to Set Up a POA?
- Responsibilities of a Power of Attorney (POA)?
- Frequently Asked Questions
- Do You Want Help Opening Bank Accounts?
POA Meaning
The meaning of POA is “Power of Attorney”, which refers to the signing of a legal document by a principal (the signatory) granting certain powers to an attorney in fact (another individual) to act on behalf of the principal.
In other words, issuing a POA means that an individual is granting legal authority to another person to act in their best interest. There are different types of POA available, including a Durable POA, a General POA, a Limited POA, and a Medical POA.
In the world of banking and finance, the most common POA is the General POA, which grants the attorney in fact power to manage financial affairs, execute transactions, and conclude financial matters. However, unlike a Durable POA, a General expires immediately upon incapacity or death.
If you are considering a POA, you should think carefully about the type of power you want to grant the attorney in fact. Likewise, you should carefully consider the type of Power of Attorney you choose. In the following section, we’ll discuss choosing a type of POA and also the steps to set up a POA.
How to Set Up a POA?
Regardless of the type of Power of Attorney you are considering, the steps to set up a POA are very similar. They include selecting the type of POA, choosing the process you wish to use to prepare the POA, and signing the POA in front of a notary public.
However, it’s important to note that certain POAs (like a Health Care POA) can have specific requirements, like setting specific limitations on the power granted, which areas they will have input, and even where your money should be invested.
Not surprisingly, each person, their requirements, and the specific power they want to grant to a POA will differ. So, it’s important to carefully consider all of the variables prior to signing. One of the main variables to consider is the responsibilities of a Power of Attorney and how the POA will then act on behalf of the principal.
Responsibilities of a Power of Attorney (POA)?
The responsibilities of a Power of Attorney (POA) depend on the specific type of POA signed and the powers granted through it.
For example, a financial Power of Attorney grants the responsibilities of managing decisions about a person’s finances while a Health Care POA grants the responsibilities of managing decisions about a person’s health and well-being.
Here is a closer look at a few of the most common POAs, their meaning, and the powers that are granted within them.
Financial Power of Attorney
Financial Power of Attorney refers to a POA that provides an attorney in fact with the power to manage your finances. This includes executing transactions, opening and closing accounts, and more.
Real Estate Property POA
Real Estate Property Power of Attorney refers to a POA that provides an attorney in fact with power related to property. This includes selling, closing, refinancing, or managing your property on your behalf.
Healthcare POA
Healthcare Power of Attorney refers to a POA that provides an attorney in fact with the power to make decisions about your medical care. This includes treatment plans and other health-related issues in accordance with the power you granted them.
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Frequently Asked Questions
Below are a few of the most common questions we receive from people looking into the meaning of POA. If you have further questions you would like to ask our team, don’t hesitate to get in touch.
What is a POA in business?
In business, a POA is used to grant power to an attorney in fact to act on behalf of a legal entity. In most cases, this type of POA specifically details the instances where the attorney in fact has power to act on behalf of the business.
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