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Power of Attorney (POA)
Last Updated March 19, 2009
Legal document wherein an individual authorizes another person ( the attorney-in-fact) to act on behalf of another person, by carrying out certain transactions.
The person giving the authority for the attorney-in-fact to act on his/her behalf is the grantor or principal.
A POA can be durable or nondurable. A durable POA continues to be in effect in the event the grantor/principal becomes incapacitated, while a nondurable POA would cease to be in effect( in the event the grantor/principal becomes incapacitated.
A durable POA is generally required to include specific language, confirming that it remains in effect in the event of incapacitation.
Additional Helpful Information
- A POA ceases to be in effect upon the death of the grantor/principal
- Financial institutions should be consulted to determine if and when they would accept POAs. Many will accept POAs, but only in limited cases. For instance, some will not use a POA to change a beneficiary designation . Some will only allow transactions that are specifically identified in the POA.