Quickly defined, a Power of Attorney (POA) is a powerful estate planning tool that allows you to appoint a spouse, trusted family member, or friend to assist with handling your financial and medical affairs during a period of disability when you might not be able to do this for yourself. This person may be referred to as your attorney-in-fact or agent. Your agent may be given these powers immediately the day you sign your POA, called non-springing, where you believe any delay to obtain a finding of disability by a doctor would be create greater problems or, instead, as springing powers granted only when one or two licensed physicians determine in writing that you no longer have the capacity to manage your financial or medical care decisions.
A Power of Attorney is a binding legal agreement that must be put into writing, witnessed, and notarized to become valid. For purposes of a financial POA, you must also make it clear, in writing, whether you are giving your agent permission to access and handle all or only some of your accounts for the POA to hold up in court.
You do not have to choose the same person as your agent for financial and medical matters; however, they do need to work together to make decisions on your behalf, according to your wishes. For instance, if you need medical treatment, your financial POA must work together with your medical POA to disclose financial information, fill out forms, or provide funds.
What’s important to keep in mind is that, absent a POA, if you become disabled and no longer have the capacity to handle your finances or make your own medical decisions, there will be delays and greater legal expenses incurred for a member of your family (perhaps even someone you would never choose for the job) to petition a court to be appointed Conservator of your assets or Guardian of your person. It is not unusual even in an uncontested matter for the costs to equal ten times the amount it would cost to simply retain an attorney to prepare a well-written POA to address these matters now before the worst happens.
Choose the Right Person for your Power of Attorney
Choosing the right person is of paramount importance. Select someone you can trust, who has your best interests at heart. Do not select someone who has had legal issues in the past or a person with whom your family does not get along. You may want to discuss your choice of person with your family before signing any documents, but this is not necessary. There are, of course, exceptions to this general rule, including same-sex couples and unmarried couples who may want their partner in the driver’s seat even if their family does not like or approve of the partner.
It is absolutely critical that you designate a person who is capable of handling your affairs and ensuring that the provisions of the POA you sign do not open the door for abuse by someone to benefit himself or herself over (which you should be their first priority) as well as your other family members by engaging in self-dealing behavior with your assets. They must fully understand their duties and be committed to taking them seriously. It is, therefore, recommended to talk to the person(s) you designate to discuss what you expect, and disclose the scope of your affairs before signing any documents. Note whether this person will charge a fee for their services; family members generally do not, but professionals like accountants and attorneys usually do.
You may also want to select a second person to serve as your secondary Power of Attorney in the event that your first choice cannot or will not perform their responsibilities, or passes away.
What if I Want to Change my Power of Attorney?
You may at any time change your assigned Power of Attorney by using a Revocation of Power of Attorney document and creating a new POA document, as a new POA document typically provides for revocation of all prior documents upon signing it. Shredding your older POA after signing a new one is absolutely critical to ensure that only the most current POA is found and utilized in the future.
Consult Your Attorney
Selecting your Power of Attorney may be one of your most important life decisions, so your choice should be considered carefully. Attorneys Patricia E. Tichenor and Camellia Safi at the Law Office of Patricia E. Tichenor, P.L.L.C., specialize in Estate Planning issues and can assist in creating the legal documents you need. Please contact us today.