What are Powers of Attorney, and why would I need one?
-- Iris, Rutland

A power of attorney is a document that allows you (the "Principal") to name another person (your "Agent") to act on your behalf with respect to specified activities, assets, or decisions. The Principal can empower his Agent to perform a specific task, such as signing documents at a real estate closing that the Principal is unable to attend, or to perform a broad range of activities.

A power of attorney is effective upon execution (unless its terms state otherwise), may be revoked by the Principal at any time, and is automatically revoked upon the death of the Principal. At common law, however, a power of attorney was no longer valid if the Principal lost his mental capacity, after a major stroke for example. Massachusetts, like other states, has adopted legislation that allows the creation of "durable" powers of attorney that survive the incapacity of the Principal. In such a case, your Agent can manage your affairs and your assets until you recover, or until you die, at which time the Agent's authority is revoked and your other estate planning documents take charge.

In short, a power of attorney allows you to do for your financial/business management what your healthcare proxy allows you to do for your healthcare management: transfer control to a person you trust. So, for example, if you become incapacitated and your spouse or family needs to sell or mortgage your home to pay for your care, your Agent can do that for you. Without the power of attorney, your family would be required to go through the process of having a guardian appointed, because even your spouse cannot sell or mortgage your real property when you are unable to give your consent (even if you hold it jointly with him/her).

(Submitted by the Editor)