A Power of Attorney (POA) is a legal document where one person (called the “principle”) gives legal authorization to a second person (called the “agent” or “representative”). The authorization directs the representative to act on the principle’s behalf. This authorization can be for either financial or medical matters.
The representative, in essence, has the power to represent the financial or medical matters for the principle. But the representative must always perform those matters in the most beneficial way for the principle. This includes paying bills, managing investments, or making medical decisions. The following list contains some benefits to having a POA.
- You can have peace of mind that your future assets will be protected
- Choose your POA representative
- Discuss with your POA representative your wishes and directions
- Place limitations on POA representative powers
- You can avoid a probate guardianship
- You can avoid family quarrels and disputes
What Are the Different Types of Powers of Attorney?
Most states require separate POAs for financial matters and for health/medical matters. The following are the 3 types of POAs to consider.:
- Durable POA – A POA that authorizes an agent to handle the financial matters of a principle (ex: a senior). A Durable POA remains in affect beyond the period of a principle’s incapacity.
- Non-Durable / Ordinary POA – A POA that authorizes an agent to handle the financial matters of a principle (ex: a senior). An Ordinary POA terminates at the period a principle becomes incapacitated.
- Medical POA – A POA that authorizes an agent to make medical decisions for a principle (ex: a senior) when the principle is no longer able to make or direct their own medical decisions.
Why Do You Need a Power of Attorney?
You may find it hard to believe, but everyone will probably need the assistance of a POA sometime. Life is full of unexpected surprises. For that reason, every adult should have a POA in place. This is because, once you are considered an adult no one has the legal right to make financial and medical decisions for you without written authority.
Without a POA, if you become incapacitated, no person can assume the legal authority to act on your behalf. With a POA, in the same situation, a representative can pay bills, manage investments, renew registrations, and even manage medical decision for you.
Who Can You Name as Your POA Representative?
You can name anyone as your POA representative (called the “attorney-in-fact”). To be specific, if a person has reached the legal age of maturity, he or she can be named as your POA representative. This can include your spouse, child, relative or friend. Every adult should have a POA in place. So, at the earliest opportunity you can identify someone you can trust with your personal financial matters and medical decisions, you should have a POA created.
What Happens if You Don’t Have a Power of Attorney?
Complications arise if you experience a health emergency that renders you unable to make financial and/or medical decisions on your own behalf. If you don’t have a durable POA or a medical POA, then your loved ones must file for a guardianship over you. A guardianship requires a legal filing through a probate court.
Once an emergency occurs that renders incapacity, it is too late to execute a POA. The probate court judge will then make the decision on who to give authority. This takes the decision-making for your future out of your hands and in the hands of a court.
The Importance of a Power of Attorney for Seniors
POA’s are very important for seniors and should be a standard part of simple estate planning. Seniors are more likely to face a health emergency. Having a trusted representative who can step in and assist with financial matters or to assist in making medical decisions is so important for a senior’s peace of mind. You should put a POA in affect before it’s needed. Having a POA in place will assure that you and your family don’t have to face stressful decisions in the event of an emergency.
Where Can You Get a Power of Attorney?
Contact a trusted local attorney in your local area. An experienced attorney can assist with all estate pre-planning that you need, he/she will be familiar with your state’s laws and requirements. Also, an attorney can make the POAs specific for you. There are some do-it-yourself POAs on-line. These are usually general in nature, but can be helpful and simple to create.
Look For Reviews
When looking for an attorney, it is important that you look for reviews of their work online. This will give you some insight into how good they are and what they can do for you. This is very important because you don’t want to end up hiring the wrong attorney and then regretting it. This will give you the ability to make an informed decision.
It’s also important that you look at reviews because you need to know the type of attorney you need. There are many different types of lawyers and when you look online, you will find out the attorney’s area of expertise. This will ensure that you get the most out of your money.
Another approach you can take, is to conduct interviews with several different attorneys. This will help you to get a wide view of the various services available as well give you a broad comparison. This is the smartest way to chose a lawyer because you can see ALL the options available and then go with whom you see fit for you.
You never want to hire the first lawyer you talk to right off the bat. You need to compare and then come to a conclusion. This ensures that you aren’t stuck with a lawyer that can’t do anything for you, and as you age, this becomes even more important.
OK, so you have found the attorney that you want, everything seems to be perfect and you’re about to sign the paperwork. Before proceeding, you should run a background check on the lawyer. This is for your own safety. Most lawyers are honest and care but there are a few that have a track record of not taking care of their client’s needs. By running a background check, you can make sure that this doesn’t happen to you.
Talk to Other Lawyers
Just like us, lawyers talk to one another. One way that you can find out about the reputation of your lawyer and whether or not he/she is a good fit for your needs, is to talk to other lawyers, this will give you some insight into their past, work, and personality. This is an important step in choosing an attorney, if you want to make the right decision.