A power of attorney is a legal document that authorizes one person, known as an “agent” to act for another person, known as the “principal.” The principal can specify which powers the agent can possess. The principal can even state that the power of attorney will only become effective on the occurrence of a defined event.
Powers of attorney can be created and utilized in a wide variety of cases. The most common is to allow elderly persons or incapacitated persons to delegate authority to manage their affairs for them. Extreme care must be exercised in the choice of agent since some agents use powers of attorney more for their own benefit than for that of the principal.
In 2009, New York State created a new “statutory short form power of attorney.” This form requires that the agent sign the form and by such signing acknowledge his or her responsibilities in acting as agent.
Properly structured and implemented, a power of attorney is an essential part of a well thought out financial and estate plan.