A power of attorney allows another to make financial and health decisions at times when you are unable. This could be due to injuries suffered during an accident or while battling a disease. It is often impossible to predict when an individual would need an agent to act on his or her behalf. As such, it is wise to have power of attorney documents as part of a well-balanced estate plan.
Those who do not yet have one likely have questions. This post addresses some of the more common questions that involve power of attorney documents.
Do I need more than one? There are generally two power of attorney documents: a durable health care powers of attorney and a financial power of attorney. As the names suggest, one document provides the power to guide health care choices and the other to handle financial matters. You can choose if you want one individual to serve in both roles or would prefer to name an agent for health care decisions and another for financial matters.
Do these documents last forever? These documents are generally structured as a “durable” power of attorney. This means that it will last until the creator dies or choses to revoke the document.
What if I do not have power of attorney documents? The court will appoint an individual on your behalf if you do not have a power of attorney in place. The court proceedings used to come to this determination are public. You can avoid this process and keep these matters private by designating a power of attorney.
How much power do these documents transfer to the person named in the power of attorney document? The answer to this depends on the language used to create the power of attorney. It is very important to carefully structure the provisions within this document to meet your needs. A failure to do so could lead to some surprises if the document is ever needed. The person named as the power of attorney may not have the power needed to make the decisions you would like made, or could have more power than intended. You can mitigate this risk by seeking the counsel of an attorney experienced in drafting power of attorney documents.