Power of Attorney (POA)

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Definition

A Power of Attorney, also referred to as a POA, is a legal document that gives one or more persons the authority to make some or all of the legal and financial decisions, property, real estate or any business related decisions on one’s behalf. A POA can be applicable for a specific or unlimited duration of time. The person to whom the powers are granted is known as the attorney. This attorney can be any mentally capable adult of legal age: a spouse, a family member, a lawyer or an accountant; must not be involved in any type of bankruptcy proceedings when powers are assigned to them and must not own or work at an extended care facility or nursing home in which the grantor is a resident.

The attorney can perform all the personal financial actions of the grantor, such as banking, signing cheques, from sell or purchase of property; however, the attorney cannot make a Will for the grantor, cannot change any existing Will, cannot change a beneficiary or give a new POA to someone else on the behalf of the grantor. Therefore, the attorney must act in the best interests of the grantor while making financial decisions, and keep own finances and property separate from the grantor’s finances. One can still continue to make decisions about finances even while having a POA and cancel a POA as long as the person is mentally sound to do so; the grantor can also choose to put restrictions on the POA. Explore Definition

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LAYMEN TERMS

Power of Attorney is like - you allowing someone else to do things for you. In the same way that parents do for their children. In the case Power of Attorney, it is mostly related to money.

HOW DOES THIS TERM APPLY TO YOU

A general Power of Attorney gives the attorney the right to sign documents for you, pay your bills, and conduct financial transactions on your behalf. For instance - if you're a businessman and you're always travelling for work, you could give someone the right (Power of Attorney) to sign a property or business deal for you on a day when you are out of town and cannot be present to sign the  deal.

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