Thu. Dec 3rd, 2020

Planet Compliance

Innovation & Regulation in Finance

Legal Basics for Compliance Professionals: Power of Attorney

4 min read

No matter your function as a compliance professional, a little legal background without doubt is helpful. It is helpful because it is a required element to analyse applicable financial regulation. And it is helpful to understand the legal consequences of an organisation’s actions and the individuals that work for it.

In our series of legal basics for compliance professionals we explain exactly that: legal basics every compliance professional sooner or later in their careers will come across, so it is better to build a solid understanding of these concepts whether as a newbie or to refresh that knowledge from the days at university. Today we look at the Power of Attorney.

What is a Power of Attorney?

If you wanted to help someone with legal challenges, then you most likely heard about the Power of Attorney or PoA. This is a legal document that allows an agent or another person in general to act for another person. There can be many reasons why you need the PoA. Maybe you need to represent a disabled person that can’t be present in court. Or you need to assist someone that’s in another country right now with legal documents. These are very common situations you can encounter, so handling them correctly can be extremely important at this particular time.

What can you do with the PoA?

Once you have the Power of Attorney, you can make financial decisions, healthcare decisions or even recommend a guardian for the person in question. It’s also possible to make gifts and you can even stop medical treatments if you believe it’s in the principal’s best interests. So yes, the PoA can be a really powerful legal document that allows you to fully take decisions for another person. That being said, the power of attorney can easily bring in its fair share of challenges.

There are four types of PoA

First, you have the General PoA. This allows the agent to perform any act in the name of a principal. It also includes financial management. This can be terminated if the Power of Attorney is incapacitated, if he passes away or the Power of Attorney is revoked.

Then you have the Durable PoA. It’s very similar to the General PoA, but in this case there’s a durable clause. This retains the Power of Attorney even if the principal becomes incapacitated.

Special/Limited Power of Attorney comes with limitations. It might be a PoA only for real estate or for acquiring a document if the principal is outside the country for example. Springing Durable Power of Attorney can be used when a very specific event appears and the principal is incapacitated and unable to perform that task. When that happens, the Springing Durable Power of Attorney comes into play, but it can be used only under specific circumstances.

What is a healthcare Power of Attorney?

This is a very specific PoA hat allows an agent to take medical decisions for the principal. It only applies if the principal is unable to take decisions on his own, if he/she is unconscious or anything similar to that. It’s not the same thing as a living will, however the principal is allowed to choose if he wants to stay to life support or not. If he signs the Power of Attorney, then that agent will take decisions for him accordingly.

The PoA is very important if you want to provide someone else with control in case you are unable to take decisions for yourself. In most situations it’s very helpful, but it can be abused at times too, which is why there are very specific types you can choose from. This will make things easier and ensure that you are obtaining the best possible outcome even if you can’t take decisions on your own!

 

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

PlanetCompliance © 2020. All rights reserved. | Newsphere by AF themes.