Four Main Types of Power of Attorney If you want to authorize anyone or any organization to properly handle your affairs while you are unable to do so or while you are unavailable, you should get a power of attorney. It is a document that summarizes and proves your agreement to give your appointed person (the agent or attorney-in-fact) the authority to act on your behalf. The latter scenario happens when the principal is out of the country for a while or when he or she becomes mentally incapacitated. Granting someone a legal authority to decide on your behalf does not necessarily mean you cannot make decisions for your own anymore. It only means that at the same time, another person can also make choices for you so you are sharing the right to decide with your agent. The appointment and authorization should be clearly stated in the legal document (a power of attorney is actually a legally effective document). How is the power of attorney created? You need to completely fill out a specific power of attorney form. It should state yourself as the principal and identify the agent you are appointing to take authority on your affairs if you become unable to do so. You could have the option not to include specifications or instructions that would give your agent the permission to transfer to himself/herself any of your property or bank account. The law usually allows the agent to transfer your assets to your spouse (if your agent is not your spouse). However, the law does not allow him/her to transfer any of your properties to any other individuals, even your children. It is recommended that you consult a lawyer to avoid conflicts or hassles in the future. The lawyer can draft the legal document and inform all the parties involved about the rights and duties stipulated in it. Once the draft is done, the lawyer will keep a copy of the document that will come in handy should legal disputes arise in the future. In some cases, a co-agent is assigned by the principal to ensure that not all responsibilities would burden one agent. To exercise more control on the transactions, the principal is also recommended to ask regular reports from the attorney-in-fact/ agent. Being aware of such issues about the power of attorney could help principals and those who are thinking of getting such document, be cautious.