What is a Power of Attorney?

 In Blog, Estate Planning Archives

The best way to answer the question “what is a power of attorney?” is to start with a thought exercise.


Let’s say that you are a married, and in your mid-forties.  You and your spouse have a few kids, and you are going about your busy lives of work, taking your kids to school and other extracurricular activities. You and your spouse share household responsibilities, with your spouse exclusively managing all of the finances.  As a result, all of the utilities and nearly all of the various bank and investment accounts are solely in your spouse’s name.

One day, your spouse succumbs to a health condition that requires a long and difficult recovery process. Sometime into their recovery, your home’s internet stops working and you receive a notice that the power company is going to shut off service due to some mix-up with the billing and payments.  Unfortunately, however, your name isn’t on either account so neither company will even share information with you.

What do you do now?

Under these circumstances, the only remedy available will require the intervention of a court of law.  To take over as your spouse’s agent, you will be forced to petition a court for an order granting you certain legal authority. Without the court order, you may not be able to access vital accounts, or act on behalf of your spouse at critical times.     

Can this be avoided?

The answer is simple. Yes!   In fact, it’s all quite easy to avoid.

If you had a power of attorney (POA) already in place, you could act immediately on behalf of your spouse.  Without delay, you would be able to ‘step-in-the-shoes’ of your spouse and legally transact business on your spouse’s behalf.

So…. what is a power of attorney?

A power of attorney is a legal document that allows you to appoint someone else to act on your behalf. You are called the “principal,” and the person whom you appoint is called your “agent,” or “attorney-in-fact.”

There are various kinds of powers of attorney.  Some are designed to go into effect immediately so that the agent can act on behalf of the principal immediately.  While others are designed so that the power does not go into effect until the principal becomes legally incapacitated, or until such time (i.e., usually at a later date) as the principal executes a separate document which immediately empowers the agent to act.

Which kind of power of attorney do you need?

There are different types of powers of attorney. It is very important that you select the right type of power of attorney because making the wrong decision could cause harm later on. In short, you could mistakenly empower your agent too soon, or possibly too late.        

If you have any questions or would like to create a power of attorney, contact Koza Law Group. We can be reached at (760) 487-8330

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