Most people, at some point in their life, execute a power of attorney. A power of attorney is an extremely useful, and flexible, legal document that can be used to accomplish a variety of estate planning objectives. While a power of attorney can be a beneficial addition to your estate plan, it is imperative that you have a clear understanding of what you are signing and the power your signature confers on the Agent. In addition, you need to know the difference between a general and a limited power of attorney.
At its most basic, a power of attorney, or POA, allows you (the “Principal”) to grant to another person (your “Agent”) the power to act on your behalf in legal matters. When you create a POA you must first decide whether you plan to create a general or limited POA. The difference is certainly important.
A general POA is one that confers a significant amount of power and authority on the Agent. With a general POA your Agent can to things such as enter into contracts in your name, sell assets of yours, and even close out a bank account in your name. In essence, when you give someone general power of attorney you give that person virtually unfettered access to your assets and finances. The one limitation that is commonly placed on a general POA related to healthcare decisions. Most states, including South Carolina, require you to execute a separate POA if you wish to give someone the authority to make healthcare related decisions for you in the event you become incapacitated.
A limited power of attorney is one in which you only confer specific authority on your Agent. For example, if you plan to be out of town for several weeks but your house is currently listed for sale you might give someone a limited POA to take your place at a closing on the property in the event it sells while you are out of town. Another common use for a limited POA is to give a caregiver the authority to consent to medical treatment for minor children during a specific period of time while the parents are unavailable.
If you have additional questions or concerns about powers of attorney, or estate planning in general, contact the experienced South Carolina estate planning attorneys at Kuhn & Kuhn Law Firm by calling 843-577-3700 to schedule your appointment.