A Power of Attorney is often a very important part of your estate plan. When most people come to my office, they immediately want to discuss their will. If they’ve read a book or some blogs, they probably want to talk about trusts. For those who have children, they often want to talk about who will take care of the children after they’re gone. But many people have not thought about a power of attorney as part of their plan. Once we begin to discuss it, the question shifts to,
What is a Power of Attorney?
A power of attorney is a document, usually prepared by an attorney, that allows someone to act on your behalf. The two most common types are a healthcare power of attorney and a durable power of attorney. As you can probably guess, the healthcare power of attorney designates someone to make medical decisions on your behalf. While many people think of this only if they are in a coma, there may be other times when you are unable to speak for yourself. Having someone designated to make the medical decisions can make sure that your interests are being represented. And if you have certain wishes for certain types of medical treatments, it’s a good way to ensure they are respected as well.
A durable power of attorney often has a long list of items that you are allowing someone to do on your behalf. These are common for real estate transactions (i.e. you can’t attend your closing so you give your spouse the power to sign the documents on your behalf). If you have your own business, it can be helpful to have one so that if something happens to you, someone else can run the business or wind up its affairs. Sometimes, it makes sense to check all the boxes and grant someone all of the possible powers. It is also common to do a limited power of attorney that relates to a specific transaction and only lasts for a certain amount of time.
Regardless of which type you are preparing, it’s important to speak to a professional to understand the document and what powers you are granting to someone else.
What Happens if I Don’t Have a Power of Attorney?
If you are incapacitated, then there will likely be a court proceeding to appoint a conservator to manage the financial affairs of the person. This commonly results in a bit of a drawn-out process with legal fees that no one was planning on spending. Even if there is no question who will be appointed conservator, it still takes time for a court to make a decision. And if time is of the essence, then each day the court takes to make a determination can have a significant financial impact. So even though it is often seen as an “add on” to your estate plan, a power of attorney can be a very important document. It can ensure that the right person is appointed to make important decisions. And it can ensure that your family doesn’t get dragged into a long and costly court proceeding.
If you’ve been considering a power of attorney, or this is the first you are hearing of it and would like more information, call my office to set up a Legal Strategy Session and we can discuss if it is the best option for your situation – (877) AMAYERS.