A Power of Attorney is a legal document that allows you to choose a trusted person to make financial decisions for you. A cornerstone of a comprehensive estate plan, a Power of Attorney, works for you now, during an illness or injury, and later, during incapacity. A properly drafted Power of Attorney considers your relationship with your appointed agent and the immediate and future needs you may not have contemplated. Having a Power of Attorney, drafted in consultation with an estate attorney is important because:
- A Power of Attorney can help you manage your finances if you are temporarily unavailable.
- A Power of Attorney can allow your agent to manage your finances to help pay your bills.
- A Power of Attorney can avoid the need for a guardianship proceeding if you become incapacitated.
Imagine you are away on vacation and realize you forgot to pay your home taxes. The payment must be made in person to avoid a penalty and the funds are in an account you don’t have remote access to. You can ask your Power of Attorney Agent to access the account, obtain the necessary funds and pay your tax bill while you are away.
Another common situation where a Power of Attorney is helpful is in a real estate transaction. What if you can’t be at a closing on your house? Your Power of Attorney Agent is able to step in and attend the closing on your behalf.
What happens if you are in an accident and can’t get to the bank? Having a Power of Attorney in place will allow your named agent to pay your bills and transact your day to day business needs while you recover.
Maybe most importantly, once you become incapacitated you can no longer appoint an agent but may need financial assistance or help with hiring care or seeking Medicaid benefits. It is essential that you’ve created a Power of Attorney before incapacity so that your agent can manage your affairs without the court stepping in to appoint a guardian.
A neighbor recently asked me where they could find the right form for a Power of Attorney so they could fill it out themselves. While it looks like it might be a “simple form” to fill out, a proper Power of Attorney, custom drafted for your particular needs and circumstances may not be easy to create on your own or by using AI programs. The time to find out your Power of Attorney is not properly drafted or doesn’t include a power your agent needs to help you is not during a crisis or after you’ve become incapacitated.
I’m often asked about Durable Powers of Attorney, Springing Powers of Attorney or Financial Powers of Attorney. Basically, those are all names for the same document. With the help of an estate planning attorney you can rest assured that the Power of Attorney you create will serve yours and your family’s needs today and into the future.
