A power of attorney (POA) is a legal document that grants a designated individual the right to make certain decisions on behalf of another. The designated individual is often referred to as the agent or the attorney-in-fact, and the person for whom they are making decisions is called the principal. Power of attorney can be a complex subject, so here are a few of the more frequently asked questions on the topic.

FAQs About Power of Attorney

What Kinds of Decisions Can a POA Make?

A POA has the authority to make a number of key decisions regarding the principal's affairs. Generally, there are four categories of decisions a POA can make:

• Financial: Examples include closing out accounts, paying bills, cashing checks, and controlling finances
• Legal: Examples include filing lawsuits, talking to lawyers, and filling out legal forms and documents
• Business: Examples include business planning, hiring and firing, and serving as your representative at meetings and in business communications
• Real Estate: Examples include purchasing, selling, renting, or managing property

Are There Decisions an Agent Can't Make?

Yes. A POA doesn't give anyone the ability to make sweeping, across-the-board decisions. You as the principal must define what choices you are permitting them to make. You can be as detailed as you want to be in your POA; in fact, you should be as detailed as possible.

One thing a POA can never decide is how your last will is written. Any changes to your will must always go through you, the principal.

Who Can Be a POA?

You can designate any legal, competent adult to be your POA. However, this is not a position you should entrust to just anybody. The individual you nominate will have access to your most sensitive and personal information, so it should be someone you trust implicitly. Also, the role can be an emotional and stressful one, so you want someone who works well under pressure.

I Have a Living Trust. Do I Still Need a POA?

Living trusts, while indispensable documents, only pertain to the specific property in the trust itself. Other property and assets not in the trust still need a POA if decisions need to be made about these items. If you don't nominate someone for the role, the courts will name someone for you, and it could be a different person than the agent in charge of your living trust.

Let the attorneys at Wills and Trusts Hawaii guide you through the process of drawing up a power of attorney. They provide comprehensive legal support in all aspects of estate planning to clients throughout the Honolulu, HI, area. Call (808) 792-8777 or visit them online to make an appointment today.