When we counsel clients concerning their own estate planning, the question often arises of the importance of powers of attorney. When drafted and used properly, powers of attorney can be strong devices to protect you and your family.
Generally, a power of attorney is a document that allows you to appoint another person (called an “agent”) to step into your shoes and assist you with your property or with your healthcare. Accordingly, there are two types of powers of attorney: the statutory durable power of attorney, which covers property and finances; and a medical power of attorney.
With a power of attorney over your property, you can name someone who can handle your property to the degree you specify in the power of attorney document. You can tailor your power of attorney to limit your agent’s powers over your property, or you can give your agent complete authority over all of your property and finances. You can choose whether you want your power of attorney effective once you sign it, or when a doctor certifies that you are not able to make financial decisions for yourself.
A medical power of attorney allows your agent to make medical decisions for you. As with the property power of attorney, you can tailor your medical agent’s powers, or you can give your medical agent the ability to make any healthcare decision for you, including decisions regarding life support.
The significant benefit of having properly drafted and properly executed powers of attorney are that the documents, if used effectively, can prevent costly and time-consuming guardianships.
Many of our initially clients feel come concern at giving another individual so much control over their property and health. However, powers of attorney are flexible documents, and you can choose to appoint only the individuals you trust. Of course, disputes can arise, but properly drafted, properly executed powers of attorney offer strong protection with many benefits.