Power of Attorney
A power of attorney is a legal document that gives a person of your choice the power to act in your place if you ever become mentally incapacitated. If you ever become mentally incapacitated, you will want what is known as “durable” power of attorney (durable in this instance means that it survives incapacity). Ordinary or limited powers of attorney (non-durable) automatically end if the person who makes them loses mental capacity. Massachusetts (unlike some states) does not distinguish between health care powers of attorney and financial powers of attorney. A separate Health Care Proxy covers a person’s medical care and treatment.
Basically, with a valid durable power of attorney, the person you name will be legally permitted to take care of important matters for you (such as paying bills and managing investments) if you are unable to do so yourself. If you do not have a durable powers of attorney and something happens to you, your loved ones may have to go to court to get the authority to handle your affairs.
The person choose is usually called your “agent” or “attorney-in-fact,” although he or she does not have to be a licensed attorney to fulfill this role. Your agent can handle mundane tasks such as sorting through your mail and depositing checks, or more complicated jobs like managing your investment accounts and filing your tax returns. Your agent doesn’t have to be an attorney or a financial expert; just someone you completely trust. If necessary, your attorney-in-fact can hire paid professionals (who are paid using your assets) to assist them if need be.