Monday, September 24, 2012

Power Of Attorney Terminology

Completing the forms that need to give power of attorney to a person or corporation may be the easy part, the terminology that you should know can be a little more confusing. However, it is a good idea to be familiar with the terms used when power is being granted. This will ensure that you understand what you are signing and what your rights are.

Power Of Attorney is when a person gives power to another person or organization to act on their behalf. There are different types of power that can be granted, however they all still involve one person giving power to another person to act for them while they can not.

Advanced Directive is considered a general term that encompasses all methods of planning to be done for the possibility of incapacitation. This does include Durable and the Heath Care Surrogate as well.

Attorney In Fact is the person that has been granted the authority to act on another person's behalf. Sometimes it is also called the proxy or the agent. This also includes co-agents or successor agents as well.

Springing Power is when a certain act or event has to take place for the power of attorney to become effective.

Durable or DPOA means that the attorney in fact stays in place even when you are incapacitated. This must be explicit in the document.

Principle is the person that is initiating the power of attorney. This is the person that will be allowing another person or organization act on their behalf.

Capacity means that the person understands the documents they are signing, they know who they are, who their relatives are, who they are granting the power to and what their assets are. Capacity does need to be determined by a doctor if during the signing of power to another person has stated that the person has diminished capacity or is not mentally sound. In a situation of this nature a physician must perform an exam and give a written evaluation stating that the person either has capacity and is mentally sound or that they are not.

Monitor is a person that is appointed that helps to prevent elder abuse and abuse of power by the appointed agent. Currently it is a law in NY. A monitor can be appointed by the principle and they are given the power to request all documents, receipts, records, disbursements and transactions that the agent has performed on behalf of the principle.

SMRG or Statutory Major Gifts Rider is a document that the principle adds to the power of attorney short form that authorizes the appointed agent to make major gift transactions and other transfers. Currently, this is only in practice in NY. This form and the power form must read together as one document.

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