Power of Attorney

What is a Power of Attorney? - A Power of Attorney (POA) is a legal document that you (the principal) authorize an individual (agent/attorney in fact)—to act on your behalf. A POA can be:

• General: broad authority over financial and legal matters
• Limited: authority restricted to specific tasks or time periods
• Durable: remains effective even if you become incapacitated
• Springing: becomes effective only if you become incapacitated

Benefits of a Power of Attorney

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

Potential Risks of a Power of Attorney

• 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.

A Power of Attorney Does Not

• Authorize medical decisions.
• Continue after your death.
• Replace a Last Will and Testament or control estate distribution.

   

  Seek Legal Advice

  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.