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When does a power of attorney go into effect?

On Behalf of | Nov 16, 2022 | Estate Planning

A power of attorney is a document that allows someone else to take certain actions on your behalf. These are things they wouldn’t be able to do otherwise.

For example, you can use a financial power of attorney to authorize someone else to make tax payments or withdrawals from your bank account. Even a direct heir would not have these rights without the power of attorney in place.

It’s not just financial, though. A medical power of attorney is often used so that the agent can make medical decisions when necessary. Again, only patients are allowed to make choices about the type of healthcare they get, but the power of attorney changes it so that someone else can have a say.

You choose when it goes into effect

If you’re wondering when something like this would go into effect – perhaps because you want to draft one but you don’t want to give up your rights yet – then you don’t need to be concerned. The decision is up to you.

Some people choose to create a power of attorney that goes into effect immediately. But, in the majority of cases, it is set up so that it isn’t used unless you are incapacitated or otherwise unable to make your own decisions. 

This is technically something of a gray area, as there could be disputes over when you can make those decisions effectively, but it means that the power of attorney doesn’t take your rights away when you sign it. You are still fully allowed to make all of your own decisions, and the POA is just used when that becomes impossible – such as after a stroke that leaves you unable to communicate.

Creating the document

You can see why this would be helpful when the unexpected happens, you may need to be sure you know what steps you need to take to set it up.