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A “power of attorney” or POA, is a written document in which a person called the grantor or principal, authorizes another person, known as the agent or attorney-in-fact, to perform certain duties as the principal’s agent. In New Jersey, there are four types of power of attorney documents that are commonly used.


General Power of Attorney


With a general power of attorney, you will authorize your agent to act on your behalf in a wide variety of situations, including financial matters. This kind of POA should be used sparingly due to the wide array of powers it grants. It goes into effect immediately and ends upon the incapacitation or death of the principal. A general POA is only valid while the principal is competent enough to agree to have control relinquished on his or her behalf. This is the primary difference between the General Power of Attorney and a Durable Power of attorney.


Durable Power of Attorney


A Durable POA goes into effect immediately and is commonly used to appoint an attorney-in-fact to make decisions for you regarding healthcare. This is sometimes used with elderly individuals preparing for the onset of Alzheimer’s or other debilitating diseases and gives a child broad leverage to manage their affairs even after they become incompetent. A durable power of attorney ends only upon the death of the principal.


Limited Power of Attorney


This kind of POA grants an individual only particular rights to act in a particular area and can have a time limit which expires. For instance the POA you grant your lawyer in a real estate closing is typically of this type. Limited directives find use in elder law when individuals are temporarily incapacitated or need help with only one area of personal management.


Springing Power of Attorney


As the name suggests, this POA springs into effect when and only when the principal becomes incapacitated. While that sounds perfect for many situations, in reality the burden of proof for legally establishing that the “springing event” has occurred is on the principal and can sometimes be difficult to establish for the state. Most attorneys prefer the durable POA for that reason.

In New Jersey, all power of attorney documents require that both the principal and the attorney-in-fact are competent and be of sound mind at the point at which they are executed. They must be signed in the presence of at least 2 witnesses and in the presence of a licensed Notary of the State of New Jersey.


Do I need an Attorney to establish POA?


There are many forms and resources online for establishing a simple POA if this is all you require. Generally an Attorney will do this as part of a complete estate planning package and so will make sure the right type of POA is established and that it is drawn as wide or as narrow as necessary so there will be no challenges when it is time to use it.  The Attorney will also facilitate the signing of all documents by having witnesses and notary automatically present for you.


Of course every situation is different and it is important that your power of attorney and all legal documents are drawn correctly to reflect your wishes and to ensure your peace of mind.


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