A power of attorney is a legal document that gives an individual the authority to act on behalf of another. This is one of the most effective estate planning tools you can employ, and it allows you to control the course of your life even when you cannot make your voice heard. Perhaps most importantly, this estate planning document can help virtually anyone. Unlike other estate planning tools, a power of attorney is not reserved for the ultra-rich or those with complex business operations. Instead, this document can be effective regardless of your situation – and your age. As with many estate planning documents, people may have various questions when approaching a power of attorney:
What is a Power of Attorney?
A power of attorney is an estate planning document that transfers decision-making authority to someone of your choosing. When you become incapacitated, this legal document goes into effect. Your family will read the document and receive instructions on who will make decisions on your behalf. From there, the designated individual will assume control and act in your best interests during your period of incapacitation. Depending on the circumstances, they may be able to make a range of important decisions on your behalf.
When Does Someone Need a Power of Attorney?
The first thing to understand about a power of attorney is that it can help virtually anyone. Even young adults can benefit from this type of document. Why? Because anyone can become incapacitated in the near future. Just consider how dangerous car accidents can be. You might suffer a coma, a debilitating head injury, or some other kind of incapacitating issue during everyday activities. Suddenly, your family would be faced with uncertainty.
Some of your loved ones might assume that you want a certain medical procedure, while others might disagree. Before long, your family could be arguing about what you would have wanted – and this can lead to rifts that last lifetimes. One family member might believe that they should sell your house to pay for your medical treatments, while another might disagree.
A power of attorney prevents these disputes by putting sole decision-making authority in the hands of a single individual. This not only helps avoid conflicts within the family but it also streamlines the decision-making process. Often, these decisions must be made quickly. A slight delay could mean missed opportunities. In a medical context, undecisive family members might even cause you to lose access to effective treatment. A power of attorney eliminates time-consuming decisions and allows an individual to make fast, decisive actions on your behalf.
Are There Different Types of Power of Attorney?
Yes, there are numerous types of power of attorney documents. The most basic form of power of attorney gives a chosen individual (known as an “agent”) complete decision-making authority over virtually every aspect of your life. These might include financial decisions and medical decisions. This is often called a “general” power of attorney. Aside from medical and financial decisions, they can act on your behalf in virtually any scenario imaginable. These might include your family business, legal matters, and so on.
You might also choose a power of attorney that deals only with financial matters. Somewhat predictably, these documents are called “financial powers of attorney.” In this arrangement, your agent will only have the authority to handle your financial decisions and nothing else. These might include selling the family home, paying your bills, collecting your retirement benefits, and filing your taxes.
Another type to consider is a medical power of attorney. As you might expect, this type of document gives an agent the authority to make medical decisions on your behalf and nothing else. They may choose specific treatments for you, select medications, and decide which hospital you will visit. They may also make important decisions regarding the end of your life. For example, they could make the decision to take you off life support. If you choose this type of estate planning document, you might want to make some of your most important medical preferences clear to your agent ahead of time.
Who Should I Choose as My Agent?
This is a question only you can answer. Ideally, you should choose someone who knows you well – someone who understands what you would want in various situations. Many people choose their spouses as their agents. However, this might not always be the best choice. A spouse has a high chance of suffering the same type of debilitating, incapacitating injuries as you if they are traveling in the same vehicle before an accident. Spouses are usually of the same age, and this might mean that they suffer cognitive decline or even dementia at the same time as you.
You might want to choose someone sufficiently “distant” from you – but with the same basic levels of trust as a spouse. If you have an adult child who lives apart from you, this could be an obvious choice. You might also consider a younger sibling or a close friend.
Remember, your agent may need to make important medical or financial decisions on your behalf. Because of these factors, many estate planners choose those with experience in these fields. For example, you might have a nephew who is an experienced accountant. You might also have a younger sibling who works as a nurse. These individuals may approach your various decisions in an efficient, confident manner.
Find a Qualified Estate Planning Lawyer Today
If you have been searching for an experienced estate planning lawyer, look no further than the Elderly Care Law Firm. Over the years, we have helped numerous estate planners with various strategies – including drafting powers of attorney. While online research may be a positive first step toward an effective estate plan, this process is highly personalized. The best estate plan for you depends entirely on your unique circumstances and family needs. To discuss these specific factors in more detail, consider booking a consultation at your earliest convenience. We will help you determine if a power of attorney is the right choice.
