Power of Attorney
What is a Power of Attorney?
A Power of Attorney (POA) is a legal document that allows you to authorize another person, known as your agent or attorney in fact, to act on your behalf and make decisions or handle specific matters according to the authority you provide.
A POA can be tailored to your needs. Depending on the circumstances, it may provide broad authority over financial and legal matters, limit the agent’s authority to specific tasks or transactions, or remain effective if you become incapacitated.
Common types of Power of Attorney include:
- General POA: Provides broad authority to handle specified financial, legal, or personal matters.
- Limited POA: Grants authority for a specific task, transaction, or period of time.
- Durable POA: Generally remains effective even if you become incapacitated, subject to applicable state law.
- Springing POA: Takes effect only when a specified condition occurs, such as incapacity, if permitted under applicable law.
Because Power of Attorney laws and requirements vary by state, it is important to ensure that your POA is properly prepared and executed in accordance with the applicable legal requirements.
A properly drafted POA can eliminate the need for costly and time-consuming court proceedings to appoint a guardian in the event you become incapacitated. It allows you to choose who can manage your affairs—not the court.
An agent under a POA may be authorized to, among others:
- Pay bills and manage bank accounts
- Handle tax matters, insurance and government benefits
- Manage investments and real estate
- Access safe deposit boxes
- Misuse can cause serious financial harm. Choose someone you trust as agent.
- Before you sign, read the POA and understand every power granted—some allow access to all of your assets.
- Be cautious with gifting powers—they can affect taxes and eligibility for benefits.
- Keep in mind that allowing changes to beneficiary designations can interfere with your estate plan.
- Financial institutions may require specific statutory language before honoring a POA. Refer to N.J.S.A. 46:2(B)(11) for specific requirements.
- Authorize medical decisions.
- Continue after your death.
- Replace a Last Will and Testament or control estate distribution.
Because a POA carries legal and financial implications, you should consult an attorney before signing. The Surrogate’s Court cannot prepare POA documents or provide legal advice.
Financial POA
Manages banking, investments, bills, and other financial matters.
Real estate POA
Allow the agent to buy, sell or manage real estate on your behalf.
Healthcare POA
Lets your agent make medical decisions if you are unable to do so.