A power of attorney, in New Jersey, is a legal document that gives rights and powers by one person (the “principal”) to another relative or friend (the “agent” or “attorney-in-fact”).
If you act as the Agent or Attorney-in-fact for another, you effectively “stand in the shoes” of the principal and can make decisions regarding finances, business, health care, and other life care matters. Commonly, most powers of attorney are immediately effective upon their execution; however, the principal doesn’t intend for it to be utilized unless the principal becomes incapacitated or unable to handle their affairs.
For example, if the principal becomes ill, possibly from an operation or accident, a power of attorney may be given to a close relative until the principal recovers.
In New Jersey, a limited power of attorney allows the principal to grant an agent authority over usually specific matters temporarily.
To grant a temporary power of attorney in New Jersey, all power of attorney documents must require that the principal and the attorney-in-fact are competent and be of sound mind when executed. Additionally, they are commonly signed in the presence of at least two witnesses and properly notarized.
You must note, however, that a power of attorney must be written precisely, and the powers granted to the agent are clear and detailed and specify what they can and cannot do. Therefore, it is always a wise legal practice to consult with a qualified, professional Moorestown estate planning lawyer about the document and its contents.
Your lawyer will ensure that a power of attorney (temporary or long-lasting) only allows the agent to manage particular aspects of your life under certain spelled-out conditions.
What Are the Types of Powers of Attorney in New Jersey?
New Jersey has four main types of powers of attorney that you can use, they are:
- A General Power of Attorney – By using a general power of attorney, you allow your agent to act on your behalf in numerous situations, such as financial matters, health decisions, real estate sales or purchases, and more. This POA should always be used cautiously because it covers many powers and legal actions.
- A Durable Power of Attorney – A durable POA commonly takes effect immediately and is usually used to make decisions regarding the principals’ healthcare. This type of POA is frequently used with elderly individuals preparing for the onset of Alzheimer’s or other debilitating diseases.
- A Limited Power of Attorney – Here, the POA grants your agent rights to act on your behalf in a specific area, usually temporarily. For example, a limited POA may be given to your lawyer in a real estate negotiation and closing.
- A Springing Power of Attorney – As its name implies, this POA would spring into effect when the principal becomes incapacitated. This type of POA can be problematic; however, as it sounds perfect in certain situations, the burden of proof for legally establishing that the “springing event” has occurred is on the agent, usually by obtaining two physician’s certifications indicating the principal is physically or mentally (or both) incapacitated. This can sometimes be challenging to establish in New Jersey.
Even a temporary power of attorney can be a powerful document that can change myriad aspects of the principal’s life. It should never be entered into without the help of a professional estate planning lawyer, whose guidance in its verbiage will help ensure it meets the principal’s needs but doesn’t “overstep” them.
Are There any Disadvantages to Even a Temporary Power of Attorney?
You must note that the powers given to the agent in any POA can vary from narrow to broad, temporary to permanent, and can take effect immediately. Nonetheless, a great deal must be considered before signing a temporary POA.
There are main disadvantages of a POA can be:
- The agent you, as the principal, appoint may act in ways or make decisions you had not intended.
- There is commonly no oversight of the agent’s activities by anyone other than you as the principal. Things can go very wrong in certain situations, such as elder financial abuse or fraud.
- With any potential for abuse or fraud in mind, certain institutions often may not accept a power of attorney.
These are just some examples of the disadvantages of a POA, and there are more. However, if a professional estate planning law firm writes the POA, usually some contents mitigate most types of possible abuse and give you ways to combat the abuse rapidly and aggressively if it occurs.
What Are Some Advantages of a POA?
A well-drafted Power of Attorney can be used for various purposes and usually is much easier to execute and use than many other legal tools.
At times, a well-drafted, detailed, durable power of attorney can even be used as an alternative to guardianship in New Jersey.
Full guardianship usually involves a profound loss of freedom and dignity for the ward, and New Jersey law requires that guardianship be imposed only when less restrictive alternatives don’t exist. There are compelling legal alternatives to guardianship, and a detailed, thorough, and empathetically drafted power of attorney may be an excellent alternative.
Some other significant advantages of a POA are:
- Usually, the single best advantage of a POA is its convenience factor. A POA acts on your behalf to handle affairs without your presence and, with professional help, can be drafted quickly and usually with the least legal hassle.
- A POA can be of enormous help if you no longer have the capacity to tend to your affairs. Although physical incapacitation does not usually qualify, other things, such as dementia, commonly do. Using a POA, your experienced estate planning lawyer can help before unfortunate turns in health, which can alleviate undue stress on family and friends.
- A POA has a lot of legal flexibility regarding power and timeframe. This makes it an excellent option for some in numerous otherwise dire situations. However, you must thoroughly discuss a POA’s use with your lawyer and do your due diligence regarding your specific situation.
I Do Need a Power of Attorney in New Jersey; How Should I Proceed?
A New Jersey power of attorney can be a powerful and effective tool for handling many of your affairs. Also, when appropriately drafted and with the help of a Moorestown estate planning lawyer, it can stop your family from going to court if you can no longer handle your affairs or effectively manage specific things in your life.
It’s vital; however, that failure to properly prepare a power of attorney or use an unreliable agent can be highly detrimental to you and those you love. If you require this excellent legal tool, consult with your law team first, and they will ensure your POA does precisely what you want it to do and nothing more.