As you get older, it becomes increasingly important that you take the time to plan for your future, the future of your assets, and the future of your family members. That means taking certain practical, financial, and legal steps! One of those steps is establishing a Power of Attorney (POA). In this blog, we’ll walk you through what a POA is, different types of POAs that are available to you, why you need one, and how to make one!
What Is A Power Of Attorney?
Power of attorney is a legal document that gives another individual that you trust the authority to make decisions on your behalf when you are no longer able to do so. These decisions can be medical, legal, and/or financial in nature, depending on which kind you choose. When you create a Power of Attorney, you are known as the “principal”, and the person you grant authority to is known as the “agent” or “attorney-in-fact”.
You can choose anyone to have Power of Attorney for you, as long as they are not a minor and are mentally competent, though it should be someone with good decision making abilities you can rely on – perhaps your spouse, or a friend, or your adult child, or close relative. You can also give your lawyer this responsibility.
Types Of POAs You Could Have
General Power Of Attorney
This is exactly what it sounds like – general authority to make decisions! A general Power of Attorney allows someone you choose to act on your behalf in any matters; it grants them broad powers to handle a variety of things (signing checks, selling property, filing taxes, etc.). As long as what they are doing is pursuant to state laws, if they have a general Power of Attorney, they can get it done!
Health Care Power Of Attorney
This kicks in in the event that you become medically incapacitated and decisions need to be made about your treatment (or lack thereof). Someone with this Power of Attorney can oversee your medical care and make medical choices on your behalf. This is commonly also known as a healthcare proxy, and it can be used in conjunction with an advanced directive so your agent knows what decisions you would want made in certain situations!
Financial Power Of Attorney
This allows your agent to manage all of your financial affairs, including bank accounts, investment accounts, Social Security benefits, checks, and more. They’ll have power over your assets; this is a lot of power, especially because you’ve worked hard to accumulate your money, so this authority especially should be granted with care and thought!
Durable Power Of Attorney
This remains effective even if your loved one is incapacitated. A general or financial Power of Attorney can be durable in nature.
Limited Power Of Attorney
This grants your agent specific powers for a pre-determined period of time and for a specific purposes – it limits their power to exactly what you want it to be! For example, say that you and your spouse are leaving the country on a bucket list trip around the world for two years; you could give your lawyer a limited Power of Attorney to handle your financial and legal affairs while you are gone so you can focus on enjoying yourself! When you return, you would regain authority over those affairs. Or say that you are having back surgery; you could give your eldest child limited general POA for six weeks while you undergo the surgery and recover, but that’s it.
Why You Need A Power Of Attorney
Having a POA gives you a much needed measure of control over your life. You can’t know what the future will hold – no one can – but this is one way to prepare for it and make sure that someone who knows you, who you trust, and who aligns with your wishes and values will be taking care of things if you cannot. Because seniors often lose measures of independence as they get older, this is one way you can hold onto yours!
The other reason you should have a Power of Attorney if you are nearing or are in retirement is that if something does happen to you – a medical emergency, a fall, or something else – your loved ones won’t have to go through a lengthy, expensive court process to gain the legal authority (guardianship, or conservatorship) necessary to take care of you and your possessions. A well-drafted Power of Attorney can clearly outline your wishes and allow them to act decisively, without delay!
What You Should Know About Power Of Attorney
It doesn’t mean that the agent can do anything they want. Legally speaking, anyone who is granted Power of Attorney has a legal responsibility to make decisions in the best interests of the person they are representing. This means that you don’t have to worry that your agent will go rogue if you aren’t around to keep them in check; they aren’t allowed to do that! Also, the scope of their authority is laid out when you create the document, so you can take care to limit their powers to what you feel comfortable with.
Power of Attorney “overrides” next of kin. If you have close family members, know that the person you grant Power of Authority to has more power than they do when it comes to making decisions if something happens to you (as long as you are still alive). That’s why it’s important to make sure that everyone is on the same page about your wishes, and to choose the individual you grant Power of Attorney to carefully!
Power of Attorney is terminated once you die or if you revoke it beforehand. When you pass away, all Powers of Attorney cease to be valid. You can also expressly revoke it, either during its creation when you establish an end date or in writing at a later time.
You can designate more than one agent, either with the authority to act separately or required to act jointly. Many seniors don’t realize this, but you can have multiple agents. If you have two children, for example, and don’t want to show favoritism (and you trust both of their judgements equally), you can give them Power of Attorney. However, if you require them to act jointly and they run into disagreements, decisions may come to an impasse, so make sure that if you go this route, the people you choose have personalities and skills to be able to cooperate.
You shouldn’t draft one yourself! A POA is a legal document, and it should be drafted by an attorney so it is compliant with your state’s laws and customzied to your unique needs! Working with an elder law attorney can give you peace of mind.
Call Elder Law, P.A., Today
At Elder Law, P.A., Attorney Ryan Jay Smollar is an experienced and knowledgeable advocate for seniors and their families. If you have questions about Power of Attorney or anything related to planning for your future, call the firm today to book a free consultation and get legal advice you can trust!