Power of attorney is an invaluable estate planning tool, but what exactly is it, and how does it work? Here, the estate planning attorneys at Rodier Family Law provide a foundational understanding of power of attorney.
Defining Power of Attorney
Power of attorney is a document in which an individual assigns another person, typically referred to as an agent or an attorney-in-fact, to act and make decisions on his or her behalf, should the individual become unable to make those choices on their own. In most cases, these decisions would be about financial, legal, or health matters. Your attorney-in-fact does not have to be an actual attorney, although they can be, and your attorney-in-fact can use your assets to hire professionals that can assist in making decisions and enacting your desires.
Power of attorney is most typically enacted if an individual is physically or mentally incapable of managing their personal affairs. As such, it is essentially to predetermine who you trust to be making these decisions for you in the case of an emergency.
A power of attorney can be either durable or nondurable. A durable power of attorney remains in effect, even if you become incapacitated. Whereas a nondurable power of attorney has specific parameters around it, causing it to be rescinded should you lose mental capacity.
Why is Power of Attorney Useful?
Creating a power of attorney is relatively easy, but can provide huge benefits should you become too sick or be unavailable to make your own decisions. Creating a power of attorney ensures that your major decisions are handled by someone you believe will best represent your interests, and prevents your loved ones from having to endure lengthy legal proceedings to make decisions regarding your finances or healthcare.
Types of Power of Attorney
There are two major types of power of attorney: financial and medical. Financial power of attorney provides legal clearance to a friend or family member, who will be able to make major financial decisions in your stead. A power of attorney can be as broad or specific as needed, cover only one major financial transaction (such as the sale of a piece of real estate), or allow the attorney-in-fact the ability to make all major financial decisions for you.
A medical power of attorney allows your attorney-in-fact, or healthcare proxy, to make decisions about your health care and medical needs. The healthcare proxy is obligated to make decisions, with the help of your doctors and medical professionals, that matches your needs, preferences and desires as closely as possible: these are usually established in an advance healthcare directive.
Both these powers of attorney should be kept separate, in order to prevent confusion and keep personal information from being disclosed to the wrong people.
How Rodier Family Law Can Help
Planning for the inevitable may be uncomfortable, but is ultimately necessary to prevent any undue stress or pain being inflicted on your loved ones. A power of attorney will provide you peace of mind, knowing your needs can be met, even when you are unable to vocalize them. Our experienced estate planning attorneys understand the legal requirements and procedures necessary to establish power of attorney, as well as draft any other estate planning documents you require: contact us today for a consultation.