In estate planning, one common tactic individuals consider to avoid probate is adding their children…
Accidents and injuries occur all the time. That’s why every adult needs a power of attorney, in the same way that everyone needs a will. A power of attorney lets you name a person who can step in to conduct your affairs, if you are unable to.
Many people assume that if something unexpected happens to them, like a sudden illness or an accident, their spouse or a family member will be automatically able to handle everything for them. That’s not always the case.
The Tri-County Times explains in its article, “Power of attorney protects loved ones,” that a POA is granted to an “attorney-in-fact” or “agent.” It gives that individual the legal authority to make decisions for an incapacitated “principal.” The laws for creating a power of attorney vary based on the state. However, there are some general similarities.
If no one has been named as an agent or granted legal access to financial, medical and other information, family members may be left out of making decisions for their loved ones. Further, the government may appoint someone to make certain decisions for an individual, if no POA is named.
Almost everyone can benefit from establishing a power of attorney.
A signed power of attorney will remove the legal obstacles that may arise in the event that a person is no longer physically or mentally capable of managing certain tasks.
A power of attorney is a broad term that covers a wide range of decision-making. The main types of POA are a general power of attorney, health care power of attorney, durable power of attorney and special power of attorney.
The responsibilities of some of these overlap, but there are some legal differences. For instance, a durable power of attorney relates to all the appointments involved in general, special and health care powers of attorney being made “durable”—meaning that the document will remain in effect or take effect if a person becomes mentally incompetent.
Certain powers of attorney may expire within a certain time period.
An agent appointed through POA may be able to handle many tasks, depending on what powers are granted in the document. They include banking transactions, filing tax returns, managing government-supplied benefits, deciding on medical treatments and executing advanced health care directives.
A power of attorney and health care power of attorney should both be discussed with your estate planning attorney, as part of your overall estate plan. Doing this with an attorney ensures that you will have the documents prepared correctly, so that if and when you need them, they will be accepted by financial institutions or health care providers.