Exactly what is a power of attorney?
Before we are able to go over the disadvantages and benefits of employing a power of attorney, you should initially realize that exactly is the idea. Power of attorney is a document that gives people the authority to act on another person's behalf for a specific period and matter depending on what is stated on the paper. This signifies that another person can sign documents for you and make choices just for you. The individual who gives the power of attorney is often known as the principal while the grantee is called the proxy or now and again the agent.
Use of the Power of Attorney
Power of attorney is used within firms where business owners have tightly bundled daily activities that need them to travel in three different countries in a span of three days. This can either be physically unthinkable or at best, physically tiring. Thus, the power of attorney helps lift the burden from the executives, letting them grow more productive. Company lawyers are often sent or subordinates who are trusted to make choices and sign the contract.
Another advantage of a power of attorney is its importance in making medical decisions. A power of attorney can likewise be provided to people, authorizing them to refuse or allow medical care to the principal if they become is not capable of creating choices for themselves. This in addition includes making the choice to pull the plug in times when only a machine is keeping the principal living.
Some people are also given the power of attorney to look after a principal's financial portfolio. Although this is well and good especially when you are so busy and want to put the company of investing your cash to a professional. But money can turn people dishonest. And here lies the one problem with a power of attorney- putting your trust in to one person.
On the down-side
Remember that in providing a power of attorney to a person, you are basically telling people who read the document or the contract that your giving the agent full rights to sign for you and concur or turn down something just for you. If the agent turns out to be corrupt, then any transactions that they handles is in danger for fraud. This is the reason why although this is a very easy action to take; only a few ever use it. Giving that sort of power to one person can be hugely risky although you plan to observe all the transactions made below your name.