What type of capacity is needed to sign a power of attorney?

If you are going to need help with your affairs and feel like a power of attorney is appropriate, it is best to sign one sooner rather than later. In order to have a valid power of attorney, the person signing it must have contractual capacity, that is, a person must be able to understand, at the time the contract is executed, the nature of the contract and its effect.

Many times I get calls from people worried about relatives who do not have their affairs in order. If the relative cannot understand what a power of attorney is (or can’t sign up for an insurance policy or buy a car), then it is probably too late to go in that direction. In that case, a guardianship or conservatorship (or both) may need to be established, which is usually more complicated than simply signing a power of attorney.

I will discuss guardianships and conservatorships, which are alternatives to powers of attorney, in a different post. However, don’t delay seeking out advice if you think you are going to need help with your affairs!

Important note: Nothing in this post is intended as legal advice, and I am not your attorney just because you are reading this. If you have any questions, contact a qualified attorney.

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