Life can throw us unexpected curveballs, and sometimes, we may need someone we trust to step in and handle things on our behalf.
Maybe you’re helping an aging parent with their finances, preparing for a long trip, or planning ahead for unforeseen medical emergencies. Whatever the case, understanding the right legal tools to empower someone to act for you is critical. Let’s explore two common options: power of attorney (POA) and proxy.
At Jordan & White, LLC, we’ve spent more than a decade helping families in Massachusetts make sense of estate planning tools like these. We understand the importance of clarity and thoughtful decision-making, and we’re here to help you feel confident about your choices.
What Is a Power of Attorney?
A power of attorney is a legal document that allows you to appoint someone you trust—called an agent or attorney-in-fact—to act on your behalf in certain situations. Depending on how you set it up, it can give your agent authority over financial decisions, healthcare matters, or other legal concerns.
Types of Power of Attorney
POAs aren’t one-size-fits-all. Here are the main types:
- Durable Power of Attorney
This type of POA remains effective even if you become incapacitated. It’s often used for long-term planning and is a cornerstone of many estate plans. - Non-Durable Power of Attorney
Unlike its durable counterpart, this ends if you become incapacitated. It’s typically used for specific, short-term situations. - Springing Power of Attorney
This only takes effect when a particular event occurs, like if a doctor determines you’re no longer capable of making decisions for yourself. - Special or Limited Power of Attorney
As the name suggests, this type is restricted to a specific purpose or timeframe. For instance, you might use it to let someone sell property on your behalf while you’re out of the country.
Massachusetts-Specific Requirements for POAs
In Massachusetts, creating a valid power of attorney involves specific legal requirements. The document must be signed and notarized, and in many cases, witnesses are also required. It’s important to work with an attorney to ensure your POA meets all legal standards.
What Can a POA Agent Do?
A POA agent’s authority can be broad or narrow, depending on the type of POA. Common tasks include:
- Managing bank accounts and paying bills
- Filing taxes
- Selling property
- Making healthcare decisions (if you grant them that authority)
While POAs are incredibly useful, they also come with risks. Choosing the wrong person as an agent could lead to financial mismanagement or even abuse. That’s why we emphasize picking someone trustworthy and periodically reviewing your POA to ensure it reflects your current needs.
What Is a Proxy?
A proxy, on the other hand, is a more limited tool. It allows someone to act on your behalf in a specific situation or event. Proxies are often used for:
- Healthcare Decisions
For example, a healthcare proxy designates someone to make medical decisions for you if you are unable to do so yourself. - Real Estate Transactions
In Massachusetts, proxies might be used in closings or to complete specific property-related tasks. - Corporate Voting
If you own shares in a company, a proxy can vote on your behalf at shareholder meetings.
Unlike a POA, proxies are typically temporary and limited in scope. They’re designed for one-time or narrowly defined situations.
Differences Between Power of Attorney and Proxy
To make things simpler, here’s a quick comparison:
Feature | Power of Attorney | Proxy |
Scope | Broad or specific, depending on the type | Narrow and situation-specific |
Duration | Can be long-term or short-term | Typically short-term or event-based |
Legal Requirements | Formal execution, often notarized | Generally simpler but may vary by use |
Common Uses | Financial, legal, or healthcare decisions | Healthcare, real estate, or corporate votes |
While both tools allow someone to act on your behalf, their scope and application differ significantly.
Choosing the Right Tool for Your Needs
Deciding between a POA and a proxy depends on your situation. Here are some examples to guide you:
- Planning for Long-Term Needs: A durable power of attorney is ideal if you want someone to manage your finances or healthcare if you become incapacitated.
- Temporary or Specific Tasks: A special power of attorney or proxy might be better if you’re granting authority for a one-time event, like selling a house while you’re traveling.
- Healthcare Planning: In Massachusetts, a healthcare proxy is the tool you need to ensure someone you trust can make medical decisions for you.
No matter your choice, it’s wise to consult with an attorney to ensure your documents are properly prepared and reflect your wishes.
Take the Next Step: Secure Your Future with Jordan & White
Planning for the future can feel overwhelming, but it doesn’t have to be. At Jordan & White, LLC, we make the process straightforward and approachable. Whether you’re looking to set up a power of attorney, designate a proxy, or create a comprehensive estate plan, we’re here to help.
With offices in Danvers and Medford, we’re just a call away. Contact us at (978) 744-2811 or visit our website to schedule a consultation. Let’s work together to protect what matters most—your family, your assets, and your peace of mind.