How Can Power of Attorney Be Used During Large Transactions?

Granting someone power of attorney (POA) can be an effective strategy to ensure that your financial affairs will be handled correctly during significant transactions. A seasoned attorney can help tailor a POA that will meet your specific needs while safeguarding your financial interests and ensuring that your wishes will be followed.

Large transactions involving real estate purchases and sales, business dealings, or the management of substantial financial investments can be very complicated. If you are looking to protect your rights and interests in these transactions, the delegation of authority to a trusted agent can prove to be invaluable. 

Understanding Power of Attorney

A power of attorney allows you to name someone as your agent and give them the ability to make certain decisions on your behalf. The scope of authority granted to your agent can vary depending on your requirements, the nature of a transaction, and the steps you want to be taken to protect your interests.

Types of Authority Granted Under a Power of Attorney

With a power of attorney, you can give your agent the authority to address a variety of issues, including:

• Financial decisions: Your agent may be allowed to handle banking transactions or investments in stocks, manage real estate property, or engage in other financial activities.
• Real estate transactions: When buying, selling, or managing real estate, your agent may be allowed to negotiate and sign contracts, handle closing procedures, and manage property taxes and insurance.
• Business operations: If you own a business, a POA can allow your agent to operate and manage the business, make executive decisions, handle payroll, and negotiate sales or mergers.

The power of attorney can be tailored to be general, granting broad powers to the agent, or it may be specific, limiting the agent’s authority to particular activities or transactions.

Protective Clauses in POA Agreements

Giving someone else the authority to manage your financial affairs is a big decision, and you will want to make sure your agent is acting in your best interests. There are several clauses that may be included in a POA agreement to provide you with protection and ensure that your needs will be met. These may include:

• Durability provision: This will ensure that the power of attorney remains in effect even if you become incapacitated. This can be crucial to avoid interruptions in the activities and decisions your agent is allowed to engage in for you.
• Gifting powers: You may explicitly allow or restrict the agent’s ability to gift your assets to other parties. This can be important for estate planning and tax planning strategies.
• Audit clauses: You may require the agent to keep detailed records and report all actions taken on your behalf. This can provide transparency and accountability.
• Springing powers: The authority of the agent may “spring” into effect only under specific circumstances defined in the POA agreement. For example, you may specify that the agent will be given the authority to address certain financial concerns if you become incapacitated.
• Revocation clauses: You can include terms in your POA agreement that will allow you to revoke the power of attorney at any time. This can provide a safeguard against misuse.

How an Attorney Can Assist With POA Agreements

When drafting a power of attorney for large transactions, your lawyer can ensure that:

• The document complies with Illinois state laws.
• All necessary powers are included, and any unnecessary powers are excluded to prevent abuse.
• The POA is executed properly, ensuring its validity and enforceability.

Your attorney can also offer guidance on choosing a trustworthy agent who can act in your best interests, ensuring that they will be suited to manage the specific types of transactions outlined in the POA.

Contact Our DuPage County, IL Power of Attorney Lawyer

If you are considering using a power of attorney to allow someone to act on your behalf during a large transaction or in other situations, contact the Naperville, IL estate planning attorney at the Gierach Law Firm by calling 630-228-9413. Our lawyer is experienced in drafting comprehensive and secure power of attorney documents. We can ensure that your POA will be tailored to your specific needs and circumstances while protecting your rights and your financial interests.