Appointing an Agent
A power of attorney is a legal document that allows you to appoint someone (your “agent”) to act on your behalf when you are unavailable or unable to do so yourself. When drafted appropriately, a power of attorney is a cost-effective way to provide flexibility, security, and efficiency in addressing any circumstance where you need someone to act on your behalf.
A power of attorney is frequently used in achieving these goals:
- Incapacity Planning: Use a power of attorney to protect your interests in the event that you become disabled. Through a power of attorney, you appoint someone you trust to make medical and/or financial decisions on your behalf when you are unable to do so yourself. Choosing your agent in advance avoids complications, uncertainty, and delays when it comes to accessing your medical information, making treatment decisions, and carrying on your financial affairs while you are unable to do so. (More information below.)
- Handling The Finances of an Elderly Relative or Loved One: Use a power of attorney to help an elderly relative or loved one manage their finances. Commonly, relatives and loved ones lose the ability or desire to handle their day-to-day finances as it becomes too overwhelming or difficult due to age or the onset of mental health issues (dementia, Alzheimer’s, etc.). Stepping in on their behalf gives you the ability to manage their assets and expenses, ensure that bills are paid, and protect against scams that often prey on the finances of the elderly.
- Managing & Selling Property from a Distance: Use a power of attorney to purchase or sell property (real estate, automobiles, personal property, etc.) in your absence. If you live or have moved out of the area, you can appoint an agent to handle any property that you have left behind. Commonly, this includes managing or selling real estate and selling personal property such as cars, boats, or mobile homes. When selling property, your agent can handle the entire transaction on your behalf without the burden of travel time and expense.
- Handling Your Affairs While Away: Use a power of attorney to allow a representative to handle your personal affairs while you are on an extended vacation, out-of-town, or overseas. Having an agent in place protects against unforeseen problems that may arise in your absence, especially if you will be out of contact or unable to quickly provide documentation. Common scenarios include serving in the military and traveling abroad for extended periods of time.
Do I Give Up Any Rights by Signing a Power of Attorney? No. As long as you can make decisions on your own, you maintain complete authority over your financial, medical, and legal decisions. Further, your agent is bound by law to act in your best interest when acting on your behalf. A power of attorney simply provides your agent with the legal ability to represent your interests when you are unavailable or unable to do so.
What Do I Need to Consider? When creating a power of attorney, consider your overall goals: What powers will your agent need to fulfill your goals? Who will be the most trustworthy and effective agent(s)? How long will your agent need to act? What do I need to include in my power of attorney to protect my interests? Our estate planning attorneys can help you work through these considerations and execute a power of attorney that best meets your goals.
Power Of Attorney & Estate Planning: Incapacity Planning
A comprehensive estate plan should include incapacity planning through the use of powers of attorney. This means appointing someone to make decisions and carry on your affairs in the event that you are physically or mentally unable to do so yourself. Planning includes both a durable healthcare (“medical”) power of attorney and a durable financial power of attorney:
- Durable Healthcare Power of Attorney: Appoints someone you love/trust to handle your medical affairs if you become disabled. If you cannot speak for yourself, your agent can step in on your behalf. This often includes accessing medical information, making treatment decisions, and consulting with your doctors. It also allows your agent to advocate for your best interests when you are unable to act for yourself.
- Durable Financial Power of Attorney: Appoints someone you love/trust to handle your financial affairs in the event that you become disabled. This often includes paying bills, managing assets, selling property, and anything that may be necessary to protect your interests while you are unable to do so.
While it may be difficult to see incapacity as an immediate risk, it is a mistake to not take planning seriously. As we continue to live longer, the risks of having some form of incapacity become greater and greater. Sometimes you can predict when mental disability may occur (early signs of dementia, Alzheimer’s or other conditions associated with getting older), but a lot of times you cannot. Circumstances such as stroke, heart attack, car accidents, or falls cannot be predicted, but these scenarios often require immediate action regarding treatment, ongoing expenses, and changes in living conditions, regardless of whether you are able to voice your desires or not.
Why Is Planning So Important? It is extremely difficult to deal with incapacity without proper planning. Once you have become incapacitated, everything that requires your permission will be put on hold until someone is given authority to act in your place. This includes accessing your bank accounts or medical records, paying for and deciding on treatment, and anything that may require your signature. Given increasing medical and financial security concerns, it is no longer safe to assume that your spouse or relative will automatically have the authority to take action. Delays and uncertainty mean risks to your well-being and unnecessary anxiety and costs to your family and loved ones. Planning ahead allows you to have a quick and seamless response to ensure your decisions are made and your interests are protected by someone you trust.
Why Are Powers of Attorney the Answer? There are numerous reasons why powers of attorney are essential estate planning tools. In fact, there are very few alternatives that are more flexible, cost effective, and efficient at incapacity planning than powers of attorney.
- Security: Protect your interests by appointing someone you trust to make decisions on your behalf. Control the scope of your agent’s power and communicate your desires in advance so they will be honored in the future.
- Independence: Remain independent for as long as you are able to make decisions on your own.
- Flexibility: Easily change or revoke your power of attorney depending on your ongoing needs.
- Efficiency: Allow your agent to quickly step in on your behalf by presenting a power of attorney as evidence of their authority.
- Savings: Avoid the additional costs commonly associated with delays, court intervention, and other alternatives.
- Peace of Mind: Ensure that your interests are protected if you become disabled or incapacitated. Avoid unnecessary anxiety and uncertainty for your loved ones.
Why Must I Act Now? While powers of attorney can be used to plan for incapacity, they cannot be used to respond to it. Once an individual has become incapacitated, a power of attorney is no longer available as a way to appoint someone to act on your behalf. More often than not, by the time a power of attorney is required, it is too late to take advantage of its benefits. Unfortunately, at that point the alternatives are often significantly more time consuming, expensive, and burdensome. Court intervention may even be required to obtain a guardianship. For this reason, you should execute medical and financial powers of attorney as soon as possible.
CONTACT KEEN KEEN & GOOD TODAY
If you or a loved one need assistance regarding estate planning or the creation of a power of attorney, call Keen Keen & Good at 610-383-7810 or email us using the intake form to the right.