It may be relatively difficult to manage the property, especially when difficult times arise. At times, it is good to have the property power of attorney. This legal document is useful in legalising someone else to transact on your behalf, specifically on your property and business. It is therefore particularly important to determine exactly what a property power of attorney is, in what circumstances such a tool may prove helpful, and what one has to do to fill out such a document.
What does property power of attorney mean
A power of attorney about property is a legal document that grants an individual, known as the attorney-in-fact, the mandate to engage in legal property matters for another person, known as the principal. This document may also be used for any kind of monetary operations, including payments for goods and services, investing, buying or selling property or other immovable assets, etc.
Why you need a property power of attorney
There are several reasons why someone might need a property power of attorney:
1.Health issues:
There are a few circumstances where if the person is sick or disabled, they will be able to independently manage the financial aspect.
2. Travel:
An agent will be beneficial for you if most of the time you spend outside the country since an agent will be able to solve most property issues when you are out of the country.
Types of property powers of attorney
There are different types of property power of attorney, each serving different needs:
1.General power of attorney:
This provides the agent with great power to work within the affairs of the principal, including the principal’s property and money.
2. Special or limited power of attorney:
This reduces the amount of decision-making freedom that an agent has as a capacity to do a particular thing or within a certain time.
3. Durable power of attorney:
This is true even if the entire management team becomes incapacitated or would not be able to manage the affairs of the business.
4. Springing power of attorney:
This can only occur in certain conditions, for instance, the mental incapacity of the principal, which will enable the attorney in law to represent the principal.
How to create a property power of attorney
Creating a property power of attorney involves several steps:
1.Choose an agent:
Choosing a reliable and competent individual to attend to your needs regarding money matters is a good idea. Often, the person could be a close relative, friend, or any professional one gets along with.
2. Determine the powers granted:
It will help if you can specifically state to what extent your authority is conferred on your agent. State clearly as to which task they are capable of doing or not.
3. Draft the document:
This paper can be drafted online using various templates, seeking the services of a lawyer or legal aid.
4. Sign the document:
Some of the requirements for a document to be valid are that it must be signed by you (the principal) and, on certain occasions, by the agent. Incidentally, if you reside in some particular area, you may require witnesses or a notary public as well.
5. Distribute copies:
Make photocopies for your agent, your financial institutions, or anybody else that you think should be aware of the power of attorney.
Agent’s role and duties
The agent appointed through a property power of attorney has several important responsibilities:
- Act in the principal’s best interest: The agent should also ensure he deals only with the business of the principal and should not be otherwise involved.
- Keep accurate records: The agent needs to keep all books of account for the transaction and decisions on behalf of the principal.
- Follow the principal’s instructions: It plays the role of ensuring that the power of attorney given to a particular individual clearly outlines how and when the agent should act.
- Communicate regularly: The agent should from time to time brief the principal on the condition of his or her property or financial affairs.
Cancelling a property power of attorney
A property power of attorney is not permanent, which means that it can be cancelled at any time provided that the principal is of sound mental capacity. To revoke the document:
- Notify the agent: Terminate the agency authority in writing by informing the agent.
- Retrieve copies: Request for all original copies used in preparing the power of attorney document to be surrendered.
- Notify relevant parties: The agent has no authority anymore, and one should inform any states, financial institutions, or other parties of this.
Potential risks
Like any other legal document that grants powers of attorney, it can at times be quite helpful, though it tends to come with certain risks. A property power of attorney is indeed very useful, but like everything in this world, it has its drawbacks as well.
Abuse of power: For instance, there could be a situation whereby an agent misuses his or her power to obtain certain things, etc. over the personnel.
Fraud: There is also some probability of some agents ‘cooperating’ as mere information procurers or even agents who are faking it and are frauds.
Mismanagement: The agent could make undesirable, reasonable choices about things involving the expenditure of money.
Conclusion
A property power of attorney is a legally enforceable instrument in which the donor gives authority to the attorney concerning matters about legal property and other related financial aspects. It can be both useful and reassuring to have it in place. Knowing the differences between each type and the process of creating such authority, as well as the duties and tasks assigned to its use, will help you make the right decision on providing such authority. The power of attorney for property can be used in a wide sense, and it can be needed because of health problems, convenience, or for the care of elder members of the family. In any case, the power of attorney for property can guarantee that all affairs will be solved according to all your wishes, even when you can’t do this yourself.