You’ve probably heard the term “power of attorney” but may not know what it means. In general, someone with power of attorney is someone designated to make decisions on your behalf. More explanation is provided below.
When Would Power Of Attorney Be Needed?
In most cases, we think of power of attorney being used in the context of incapacity. That’s why POA is so often associated with estate planning and elder law.
As unsettling as it is to imagine, there may come a time when you become cognitively or physically incapacitated. That means being unable to make and/or communicate decisions on your own behalf. This could be the result of cognitive decline (dementia, Alzheimer’s, etc.) or as the result of an accident (severe traumatic brain injury, coma, etc.). In such cases, you’ll need someone to serve as your “attorney-in-fact,” or the person you’ve chosen to make decisions on your behalf. If you don’t designate POA before becoming incapacitated, someone may need to petition the court for guardianship or conservatorship after the fact, which is more legally involved and gives you no control over who has control of your affairs.
Another POA scenario is appointing someone to represent you in legal matters when you cannot be there in person to represent yourself. If you took a job in another country and needed to start right away, for instance, you could appoint someone to handle the sale of your home and act as your legal representative. POA in these scenarios tends to be very limited in duration and scope (a narrow set of powers granted to your representative).
Two Basic Power Of Attorney Categories
When you grant someone power of attorney (for more than a very limited time/purpose), the designations typically fall into two categories: Financial POA and Health Care POA. Financial power of attorney designates someone to make decisions on your behalf regarding finances, property, your estate and your living arrangements. Health care power of attorney designates someone to make medical decisions on your behalf.
In either case, you will need to designate a durable power of attorney if you are arranging for incapacity or the possibility of incapacity. “Durable” means that the designation is still in effect if you become incapacitated. You can (and probably should) also specify that POA will only go into effect after you become incapacitated (as determined by one or more doctors).
Choosing An Attorney-In-Fact
It goes without saying that the person or people you choose should be trustworthy and willing to learn/abide by your wishes. This could be a friend or relative, but it could also be a specific organization or even a licensed attorney.
Depending on your needs and wishes, you could appoint a single power of attorney (to handle all your financial and health care matters) or give the job to two or more people. The decision is yours, but things obviously get a bit more complex as more people are brought in.
Have Questions? Talk To An Attorney.
Power of attorney is a serious decision that shouldn’t be made lightly. However, you also don’t need to be intimidated by the decision or the legal process. If you have questions/concerns or want to get started naming POA, contact a law firm to speak to an estate planning attorney in Mesa, AZ today.
Thanks to Citadel Law Firm for their insight into estate planning and power of attorney.