The Benefits of Financial and Healthcare Powers of Attorney
The power of attorney (POA) is a legally-binding document that gives a responsible person of your choosing the ability to make decisions on your behalf when you are unable to due to being incapacitated or unconscious. You can appoint anyone to be your agent such as a close friend, relative, or partner.
The person to whom you have given power of attorney can pay your bills, manage your property and investments, and make decisions on medical care. For example, if you were in an accident that rendered you unconscious or in a coma, your agent can make decisions regarding your health care and finances.
When you create a power of attorney (POA), you create a legal document giving someone the legal authority to make decisions and act on your behalf. Many people incorporate this document as part of their “advance planning” or estate planning.
When you assign the POA rights ahead of time you have a solid plan for who you want to appoint and what rights you want them to have.
You appoint the person you want to make the decisions for you, someone you trust that knows your wishes and what you would want to be done if something were to happen. Family members mean well, but may not agree with your wishes and if the time comes when you are incapacitated without a POA, a family member can apply for guardianship and make the decisions as they see fit.
Also, having a power of attorney in place may eliminate costly court action for guardianship, as well as the possible strain amongst family members and delays on important procedures or decisions while the matters are in court.
What makes a POA “durable” is the fact that the agent or attorney-in-fact retains this authority even if your mental or physical health eventually leads to incapacitation. In a POA, you can grant the power immediately or your state may also recognize “springing” POAs, which are a form of a durable POA, but only come into effect when you become incapacitated. The POA document should specify the exact definition of incapacitation, so as to avoid any future confusion or battles over when the POA should be activated. A doctor may have to agree that you meet the preconditions for incapacitation included in the POA. You should discuss these issues with an estate planning attorney and determine how you may want them addressed in your estate planning.
While by law the agent or attorney-in-fact is in a fiduciary position and is to act in your best interest according to the powers you have granted them, they can make decisions without your consent. That makes it all the more critical the agent is someone that you trust and who understands your financial wishes. If it appears that your financial agent is not acting in a way consistent with your interests, a court can revoke their authority, but this typically requires that the authority first be challenged.
Choose wisely who you appoint as an agent or attorney-in-fact. You may decide to name one agent for healthcare and someone different for financial. You may decide to name more than one person to act together.
For assistance with your POAs, contact LegalShield for a personal legal plan. Our network of provider attorneys can help you address every last detail, so you rest assured that your future is covered.