What Mistakes Should I Avoid When Drafting a Power of Attorney?

 Posted on November 27, 2024 in Estate Planning

A power of attorney is an essential legal tool in estate planning that allows a person (an agent) to make decisions and perform tasks on behalf of someone else (the principal). Principals use powers of attorney for many situations and purposes, including healthcare needs, real estate deals, tax filing, financial management, overseas transactions, and more. However, a power of attorney that is incorrectly drafted can lead to serious consequences, especially if it is legally invalid or provides the agent with powers that are too broad. Therefore, a power of attorney should be created by a qualified Ohio estate planning lawyer.

What Is a Power of Attorney Used for?

There are two main types of powers of attorney in Ohio:

• Medical power of attorney: This allows an agent to make decisions about the principal’s healthcare. It is usually used when a principal becomes incapacitated and can no longer make such decisions.

• Power of attorney for finances: This authorizes an agent to make certain financial decisions and perform specific financial tasks on behalf of a principal. While this is sometimes used to protect a principal’s finances in the event of incapacitation, it is also used for overseas transactions, real estate investments, financial management, and more.

What Are Some Common Mistakes When Drafting a Power of Attorney?

Here are some of the most common errors principals make when drafting powers of attorney:

• Choosing the wrong agent: Selecting the right agent is a vital element in an effective power of attorney. Sometimes, principals end up appointing agents who are disloyal or incompetent, which can cause harm to the principal even if the power of attorney document is legally sound. An agent has a fiduciary duty to act in the best interests of the principal, so principals should choose agents who are willing and able to do so.

• Improper definition of authority: Another common mistake principals make is failing to exactly define the authority they are granting their agents. Defining it too broadly can give an agent unchecked power that can devastate the principal’s interests if used improperly. On the other hand, defining the authority too narrowly can restrict the agent’s ability to carry out the principal’s wishes.

• Failing to properly execute the document: Even if the right agent has been chosen and the power of attorney has been drafted correctly, it may not be effective if it is not properly executed. According to Ohio law, a power of attorney must be signed before a notary public. If it is a medical power of attorney, it must be signed before two witnesses who are not related to the principal by blood, marriage, or adoption. 

• Using a DIY power of attorney: Sometimes a principal may decide to execute a do-it-yourself power of attorney by using a generic template. However, a power of attorney that does not carefully conform to Ohio laws and regulations, such as state healthcare provisions for a medical power of attorney, can be invalidated. Having a qualified lawyer draft a power of attorney is therefore the safest option.

Contact a Medina, OH Power of Attorney Lawyer

Whether for healthcare or finances, a power of attorney is an important instrument that can be very beneficial but also carries major implications if done incorrectly. At The Law Office of Whitney K.S. Miller, LLC, we are known for our attention to detail and commitment to protecting our clients’ interests. Let us draft a robust power of attorney to meet your medical or financial needs. Call 330-725-4114 to consult with an excellent Medina County, OH estate planning attorney today.