I often work with families who need to determine the power of attorney (POA) for themselves or a loved one. I have found that most of the time they are unsure of what a POA does, or how to choose the right person for this responsibility. It is important to sit down with a trusted elder law representative, so you are comfortable with this document, and all your questions are answered.
What is a Power of Attorney?
A power of attorney is a legal document that allows you to appoint someone to represent or act on your behalf when you are unable. This person can begin immediately or as soon as you are unable to act on your own. You can choose a spouse, child, or another trustworthy person. As the creator, you are considered a principal. The person you choose is referred to the attorney-in-fact or an agent.
What is a Durable Power of Attorney?
Elderly individuals often have their own special type of power of attorney called a “durable” POA, and it is sometimes considered the most important aspect of estate planning. Without a durable power of attorney, no one will be able to represent you unless a court appoints a guardian or conservator. This is like a regular POA, but if you are to be incapacitated, durable power of attorney will remain in effect. You can craft your durable POA to transfer financial and medical decision-making if you become incapacitated.
Consider These When Making a Power of Attorney
When choosing someone as your agent, consider someone you trust. Your agent will oversee many different aspects of your life. When they are making decisions, it is important for them to act as you would. They must be consistent as a fiduciary, which means they will be held to the highest standards of good faith to act with your best interests to keep your goals and wishes in mind when making decisions. Some areas that they will oversee will be:
- Your finances on your behalf to make investments and take spending measures that you yourself would make. If you did not place any limitations on the power of attorney, then they can open your bank accounts, withdraw funds, trade stock, pay bills, and cash checks.
- Legal matters that may arise, such as or determining if you have a Will and what the contents are.
- Your property will now be in the hands of your agent. They will have to make a detailed list of all your assets and distribute them as you would deem fit.
A power of attorney takes effect as soon as it is signed unless you choose a “springing” power of attorney. This will only go into effect if an event, described in the POA takes place, such as you are incapacitated. Having a conversation as the principal to your agent is very important to communicate when they can start. Even though after you sign the document, you may not need them to step in right away.
If you would like to learn more about what a power of attorney is or other parts of elder law, I urge you to contact me. I am here to answer your questions and put you at ease throughout this process.