Caring for elderly parents can be challenging, especially when it comes to handling their legal and financial matters. One essential tool to help you manage your senior parent's affairs is a power of attorney. Because each state has its own rules regarding power of attorney, it’s important to make sure you know New Jersey’s requirements for a valid power of attorney. In this comprehensive guide, we will discuss the different types of power of attorney available in New Jersey, their benefits and limitations, and how to create a power of attorney to ensure the well-being of your elderly loved ones. To learn more about New Jersey power of attorney, read on below or reach out to the Sunbound team for more information.

What is a Power of Attorney?

A power of attorney is a legal arrangement that allows one person (the principal) to grant another person (their agent) the authority to act on their behalf. It is crucial to choose someone trustworthy and competent for this role, as they will be responsible for making important decisions and carrying out tasks as outlined in the power of attorney document. Often times in the context of senior care, the senior’s adult children will be their agent although they are of course free to choose any trusted third-party, such as a colleague or close friend.

The scope and duration of a power of attorney relationship will be laid out in the power of attorney document and can be crafted to cover most things in your senior parent’s life. Sometimes a grant of power of attorney will be used for a limited purposed, such as helping your senior parent sell their home or car, while other times it will be used for more open-ended care and support, such as when an adult child helps make healthcare decisions on their senior parent’s behalf.

While power of attorney is generally thought of as coming into effect once a senior parent can no longer make decisions on their behalf, it can be a smart idea to create power of attorney well in advance of your senior parent starting to lose their independence. By creating a power of attorney well ahead of time, you can make sure that all of your parents affairs will be handled exactly as they see fit when the time comes. 

Types of Power of Attorney in New Jersey

There are several types of power of attorney documents available in New Jersey, each with different purposes and characteristics. The most common types of POAs include:

General Power of Attorney

A general power of attorney grants the agent broad authority to act on the principal's behalf in various situations, including financial matters. However, it becomes invalid once the principal becomes incapacitated. This type of power of attorney is useful is a senior parent requires on-going help managing many aspects of their life.

Durable Power of Attorney

A durable power of attorney is designed to remain in effect even if the principal becomes incapacitated. This type of power of attorney is particularly helpful for senior parents who may be concerned about future physical or mental disability, and is often a part of estate planning. It can cover both financial and healthcare decisions, ensuring that the you can continue to manage your senior parent's affairs under any circumstances.

Limited Power of Attorney

A limited power of attorney grants the agent specific powers for a particular task or a limited period. This type of power of attorney is often used for temporary situations, such as allowing an agent to handle a real estate transaction on the principal's behalf.

Springing Power of Attorney

A springing power of attorney becomes effective only when a specific event occurs, such as the principal's incapacity. Much like a durable power of attorney, this type of power of attorney is often created as part of forward looking estate planning. 

Why is a Power of Attorney Important for Elderly Parents?

A power of attorney can provide numerous benefits for senior parents and should be discussed as a family even if your senior parent is still comfortable handling their own affairs. First, it allows a trusted family member or friend to manage your senior parents financial and healthcare matters according to a plan that they themselves helped create, which can help ensure their well-being and peace of mind. In addition, it helps cut off the possibility of a costly or complicated court process, such as guardianship or conservatorship, should your parent become incapacitated and need assistance managing their affairs. Further, it can help bring peace to family affairs and reduce disputes among family members as the senior parent’s wishes are all laid out and organized ahead of time. 

Creating a Power of Attorney in New Jersey

If you or your senior loved one is thinking about creating a power of attorney, the best first step is to speak with a local New Jersey elder law attorney. Not only will an elder law attorney be able to make sure that you properly set up and document your power of attorney relationship, they will also help you think through all the ways in which you can prepare to help take care of your senior parent’s needs. Once you’ve discussed power of attorney, the steps to creating a New Jersey power of attorney are generally:

Choose an agent: When selecting an agent for your senior parent’s power of attorney, consider factors such as trustworthiness, competency, and geographical location. It's advisable to choose just one agent to minimize potential conflicts, but you can also name a successor agent to act as a backup in case their first choice is unavailable.

Draft the power of attorney document: You can create a power of attorney document using a power of attorney form provided by the New Jersey state government, online software, or by contacting a local New Jersey attorney to help you draft the document. While we always suggest consulting a local attorney, an attorney isn’t required to draft the power of attorney document. 

Sign the power of attorney in the presence of a notary public: New Jersey requires that your power of attorney be notarized to be valid. Ensure that you sign the document in front of a licensed notary. It is also a best practice to have a witness to the signing, in case there are any questions later as to the validity of the power of attorney document. 

Store the original power of attorney in a safe place: Keep the original power of attorney document in a secure location that is easily accessible to your loved ones. Inform them of the document's whereabouts so that they can access it when needed.

Give a copy to your agent: Provide your agent with a copy of the power of attorney to familiarize them with its contents and their responsibilities. They will also probably need the power of attorney document to transact on your senior parent’s behalf.

File a copy with the county clerk's office (if applicable): If your senior parent’s power of attorney grants their agent the authority to handle real estate transactions, they should file a copy with the land records office in the county where they own property.

Give a copy to relevant institutions: Providing copies of your senior parent’s power of attorney to relevant institutions like banks, doctors, or lawyers can help prevent potential issues when their agent needs to act on their behalf.

When Does a Power of Attorney Take Effect and End?

A power of attorney usually takes effect immediately unless otherwise specified in the document. In addition, the power of attorney document can also lay out when the power of attorney relationship will be concluded, such as at the end of a real estate transaction in the case of a limited power of attorney. A power of attorney relationship will also generally be ended by the principal’s incapacity, unless it is a durable power of attorney as mentioned above. Finally the power of attorney relationship automatically ends upon the principal's death. 

Also keep in mind that your senior parent also has the choice to revoke their power of attorney at any time, as long as they are mentally competent. This might be necessary if your senior parent wants to change how their care is being managed or by who. 

Establishing a power of attorney for your senior parent in New Jersey is an essential step in ensuring their well-being and safeguarding their interests. By understanding the different types of POAs available and following the necessary steps to create one, you can provide your elderly loved ones with the support and care they need.

To learn more about how Sunbound can help make senior living more affordable for you or your loved one, send us an email at info@sunboundhomes.com or request more information on Sunbound. Sunbound is the best way to pay for senior living and is on a mission to make senior living affordable for everyone.