Power of Attorney
What is the difference between co-ownership and power of attorney?
Co-ownership is the managing of finances by two or more persons. It can be between friends, relatives, or any other acquaintances. When the management of handling finance is bestowed on a third party, it is known as power of attorney for finances.
Co-ownership takes place when a person selects other persons to manage his or her finances.
- The co-owners are legally responsible for managing the estates and finances of the concerned person.
- The position of the co-owners can be filled by a specific person or persons who are recommended in the will of the decedent.
- If a will is not available, the position may be filled by someone who has a relationship with the decedent.
- The co-owners can legally manage the monetary and financial activities of the decedent. They are also liable to act legally for the decedent and make important legal decisions.
Power of Attorney:
It may also be the case that some third party is assigned the job of managing the finances of the decedent. In that case, the decedent has to clearly mention the name and the position of the power of attorney in the legal documents. The tasks that have been assigned should be mentioned clearly in the legal document. The legal document acts as a form of legal authority allowing the power of attorney to manage the financial affairs of the person in case of death or disability.
The person or the organization assigned the job of handling the finances is called the agent or attorney-in-fact. The power of attorney is also known as administrator, personal representative, or executor. Lawyers as well as law firms can also act as power of attorney.
- The person who has been assigned the post of power of attorney can act on behalf of the principal (the person who signs the document).
- The attorney’s powers and responsibilities are limited to the power that has been granted in the attorney document.
- The attorney needs to file, within one to three months of the owner’s death, a complete list of the inventory mentioning the assets of the owner.
- The inventory needs to be submitted in court along with the legal documents. The inventory is important for two reasons. Firstly, to indicate the details of the items of the property and secondly, to inform the creditors and other interested parties.
Although most states do not require the power of attorney document to be signed in front of witnesses, it is still a good idea to have witnesses watch you sign and then sign themselves.
- The signatures of witnesses may make the power of attorney more satisfactory to those your executor might have to contend with.
- With witnesses, you have people who can attest that you were of sound mind and legal age at the time of appointing the power of attorney.