A power of attorney can be: special (also called limited), general or temporary. A special power of attorney is a power of attorney limited to a specific act or type of act. A general power of attorney is a power of attorney that allows the agent to make all personal and business decisions.[10][11] A temporary power of attorney is a power of attorney with a limited amount of time. [12] If necessary, a continuing power of attorney can be revoked or amended as long as the client is still mentally capable of acting. Gifts are an important tool for many estate plans, and your attorney can actually make gifts on your behalf, subject to the policies you set out in your power of attorney. For example, you can allow your lawyer to make “annual exclusion donations” (up to $14,000 per beneficiary per year in 2013) on your behalf to your children and grandchildren. It is important that the attorney preparing your power of attorney drafts the document in such a way that your attorney is not exposed to unintended inheritance tax consequences. While some states allow attorneys to make gifts under the law, others require explicit permission in the power of attorney. If you have older documents, you should check them with your lawyer. Due to the high exemption from inheritance tax ($5 million adjusted for inflation), many people who had given agents the right to make donations may no longer want to include this power.

Others, however, to allow their agent to minimize the state`s inheritance tax, could go ahead or add such a power. Finally, there may be reasons not to limit the donations your attorney can actually make to annual exclusion donations to facilitate Medicaid planning or to minimize or avoid state estate tax beyond what annual exclusion donations alone could allow. The term lawyer is used in many jurisdictions instead of the term agent. [2] This term must be distinguished from the term lawyer. In the United States, a lawyer is a lawyer who is also admitted as a lawyer in a particular jurisdiction. A lawyer may in fact be a layman and is authorized to act in accordance with the powers conferred by a power of attorney, but may not perform any act that would constitute an unauthorized exercise of law. In financial situations where a principal requires a securities dealer to perform extensive investment functions on behalf of the principal, regardless of the principal`s advice, the dealer must be formally granted a power of attorney to act on the principal`s account. This rule also applies to clients who require their brokers to execute certain specific trades and to principals who trust their brokers to execute certain trades in the best interest of the principal. [Citation needed] Why would anyone give another person such authority? One answer is convenience. If you are buying or selling assets and do not wish to appear in person to complete the transaction, you can avail yourself of a power of attorney. Another important reason to use powers of attorney is to prepare for situations where you may not be able to act on your own behalf due to absence or disability. Such a disability may be temporary, for example, due to travel, accident or illness, or it may be permanent.

Many states require powers of attorney to be notarized. Even in states where this is not the case, it can be much easier for the agent if a notary`s seal and signature are on the document. A power of attorney or letter of power of attorney is a written power of attorney to represent or act on behalf of others in private, commercial or other legal matters. The person who empowers the other to act is the client, settlor or donor (of power). Whoever is authorized to act is the agent[1], the lawyer or, in some common law jurisdictions, the lawyer in fact. There are two types of powers of attorney under Irish law: general powers of attorney allow agents to bring any legal action their principals may bring. For example, the agent could open or close bank accounts in the name of the principal, assert or waive the principal`s contractual rights, or buy or sell shares for the principal. In most jurisdictions, even a general power of attorney is not unlimited due to laws or precedents. For example, a jurisdiction could actually prohibit lawyers from using their clients` assets to pay for themselves. Some key authorities cannot be delegated. This includes the authority to do the following: A power of attorney should be considered when planning long-term care.

There are several types of powers of attorney that fall under either a general power of attorney or a limited power of attorney. You can specify exactly what powers an agent is allowed to exercise by signing a special power of attorney. This is often used when certain issues cannot be dealt with due to other obligations or for health reasons. A person designated as a power of attorney is not necessarily a lawyer. The person may simply be a trusted family member, friend, or acquaintance. At common law, a power of attorney becomes ineffective when its grantor dies or becomes “incapable,” meaning that the grantor is unable to grant such a power of attorney due to, for example, bodily injury or mental illness, unless the grantor (or client) indicates that the power of attorney remains effective even if the grantor becomes incapacitated. This type of power of attorney is referred to in the United States as a “power of attorney with permanent provisions” or elsewhere as a “continuing power of attorney,” “permanent,” or “continuing.” Under a permanent authorization, the attorney`s power to act and/or make decisions on behalf of the grantor continues until the grantor`s death. [13] The term for the person granting the power of attorney is “principal.” The person who receives the power of attorney is called an “agent” or “real agent”. Check if your state requires the use of specific terminology. .