Why You Must Have a Power of Attorney
This is what can happen without up-to-date, customized, and properly executed power of attorney documents:
Emma watched with tears running down her face. She nudged her estate planning attorney, urgently and repeated, “That's not true, that's not true.” Sadly, it was true and a court guardianship was in process.
The social worker testified that Emma wasn't changing her clothing and there wasn't appropriate food in the house; the medical doctor testified that Emma didn't know where she was or what year it was.
Emma didn't have a power of attorney and a court process was required to otherwise others to act on her behalf.
The court concluded that Emma was indeed incapacitated and it appointed a local attorney as the guardian of Emma's estate (the money) and Emma's daughter as guardian of her person (health care and living arrangements).
The bill for the guardianship was in the thousands. There were ongoing fees for the guardian.
On the other hand, the fee for a general power of attorney and a health care power of attorney would have been somewhere in the hundreds range. In addition, Emma would have stayed in control of her finances, health, and life, having chosen her own trusted agents as opposed to having the court oversee and run her life.
Use These 2 Powers of Attorney to Plan Ahead, Save Money, and Stay in Control
Like most things in life, if you plan ahead, it costs you less and you have more choices and control than if you wait for an emergency to arise. We'll summarize two essential powers of attorney:
- General (Financial) Durable Power of Attorney
- Health Care Power of Attorney
General (Financial) Durable Power of Attorney
A general durable power of attorney authorizes trusted helpers (i.e. agents) to act on your behalf.
When is a General Durable Power of Attorney Effective?
Though most general durable powers of attorney are effective immediately, they can be drafted as “springing powers” that “spring” to life upon the occurrence of a specific event, such as disability.
What are General Durable Power of Attorney Agent Duties?
Your agent will have general powers to handle your finances and day-to-day business affairs such as dealing with the mail, paying bills, and handling financial investments and real estate.
How do I Choose Power of Attorney Agents?
It's imperative to choose agents who are:
- Completely trustworthy,
- Good record keepers,
- Effective communicators
- Responsible with money matters.
Be sure to choose successor agents who will act in the event your primary agent is unwilling or unable to act on your behalf.
When Update?
Power of attorney documents need to be updated on a regular basis. Every 3 to 5 years is a minimum.
Power of attorney documents are often turned down as stale (too old) or not current with the law. Though your named agents can sue to have the document enforced that's likely more trouble and more expensive than it's worth.
How Avoid Court Interference?
If there is no power of attorney or your financial institutions don't honor your document (as is sometimes the case for Internet downloaded documents), a court guardianship (“conservatorship” in some states) is required.
The guardianship process is public, lengthy, expensive, and stressful. It all can be avoided with an up-to-date estate plan that includes a general durable power of attorney.
Health Care Power of Attorney
If you want to choose who makes medical decisions on your behalf when you cannot, you must have an up-to-date health care power of attorney.
When is a Health Care Power of Attorney Effective?
A health care power of attorney is only effective when your doctors feel that you cannot provide informed consent. Then, and only then, your trusted helpers (health care agents) will make health care decisions on your behalf.
What are Health Care Agent Duties?
Examples of health care decisions would be hiring and firing of medical personnel, whether you get the operation - or not, and whether you try a new medication or not.
Does the Health Care Power of Attorney Work Alone?
Some health care powers of attorney include a living will and HIPAA release - and some do not. If yours doesn't, you'll need these documents in addition to your health care power of attorney.
- The living will is an advanced medical directive, meaning that you make a health care decision in the present for a situation that may - or may not - arise in the future.
The living will states that although you want to be kept as comfortable as possible, you don't want medical heroics (such as life support machines) to artificially extend your life.
If you have a living will, this takes the burden of making this difficult decision off of your health care agent's shoulders. You've already made the decision and your agent must support that decision.
- The HIPPA release authorizes medical personnel to communicate with those you've named as health care agents in your health care power of attorney.
The HIPPA release meets federal privacy rules and is essential.
How do I Choose Health Care Power of Attorney Agents?
It's important to choose health care agents who can:
- Deal with medical issues and stressful situations,
- Communicate effectively with medical personnel,
- Be an assertive advocate for your wellbeing.
This may or may not be the same person(s) you choose to be your financial power of attorney agent.
Be sure to choose successor agents who will act in the event your primary agent is unwilling or unable to act on your behalf.
How to Avoid Court and Legislative Interference?
If you don't have a health care power of attorney, state law or the courts will decide who makes health care decisions on your behalf.
2 Essential Powers of Attorneys: The Summary
Each and every adult, age 18 or older, needs his or her own general durable power of attorney and health care power of attorney documents. Be sure that your power of attorney is up-to-date and will do what you want it to do.
It is not okay to download a form from the Internet. Without legal counseling and formalities, chaos can ensue. Your family may end up in court or your documents may not work.
Always work with a qualified estate planning attorney to ensure that your power of attorney documents fit your individual situation, are drafted properly, and are executed with all required legal formalities.
How to Find an Estate Planning Attorney
To find a qualified estate planning attorney, use or website, www.attorneys.org, or ask friends, family, or the bar association for a referral.
