Why Would You Need Power Of Attorney?

What is Power of Attorney?

Power of attorney is written authorization giving an individual the power to act on your behalf in legal, financial, or health matters. You can grant someone power of attorney for any action you can legally do for yourself.

When designating power of attorney, you can select any individual that you trust over the age of 18. The person you select is known as your appointee or attorney-in-fact and makes decisions in your best interest if you are unable to make them.

In estate planning, granting power of attorney for different things is an essential step to keep your affairs in order. You can split up different legal powers among different people to maintain your wishes if you are unable to make decisions in the future.

Benefits of Granting Power of Attorney

Granting someone power of attorney can offer a lot of benefits. It’s a good step in preparing for the unexpected. It’s one of the first steps to set up your estate and should be done in most cases when creating your estate plan.

Protect your Assets

Designating an appointee outlines all of your assets and gives directives on when they can access them. The authorized agent will manage your property and financial assets, as you outline in the document.

The power of attorney outlines your intent and wishes for your assets in advance. Determining your wishes and who will carry them out can help protect your assets from mismanagement if you’re unable to manage them on your own.

Prepare for Medical Emergencies

A healthcare power of attorney outlines important information, such as your healthcare provider and your health records. This information allows your authorized agent to make medical decisions on your behalf.

Prevent Family Conflict

If there is no power of attorney in place, there can be disputes between family and loved ones over what decisions should be made and who gets the final say. Having documentation indicating that you chose an authorized agent can help avoid this conflict and have your wishes followed.

Provide Financial Security

Designating an individual to handle your finances through a power of attorney directive can help give you peace of mind. With someone you select to handle your finances, you can be confident that your finances will be managed according to your wishes.

Avoid Conservatorship

If you are unable to make your own decisions and don’t have a power of attorney in place, the court may have to appoint a guardian to manage your assets and make decisions on your behalf. 

You and your family will have no control over the court-appointed conservator. With no power of attorney in place, you could risk having a guardian of your estate who does not know or follow your wishes.

Types of Power of Attorney

There is a variety of powers of attorney. You can authorize limited or broad power of decision-making. The type of power of attorney you grant can change your authorized agent's ability to make decisions or when they can act on your behalf. 

It’s important to note that power of attorney is not only used when someone is incapacitated; it can come into play in any situation where someone is unable to act. For example, Americans living overseas can assign power of attorney to handle affairs and assets in the United States while they’re abroad.

General Power of Attorney

General power of attorney begins when the document is signed and continues until you become mentally unable to make coherent decisions. In a general power of attorney document, the exact authority being granted must be stated.

Durable Power of Attorney

A durable power of attorney starts when signed and stays in effect for a lifetime unless you initiate a cancellation. A general power of attorney document should specify that it has the power to stay in effect even if the principal, you, becomes incapacitated.

Springing Power of Attorney

A springing power of attorney only comes into effect if or when specific events occur. A springing power of attorney document needs to be carefully worded to avoid confusion or problems identifying when the triggering event happens.

Medical Power of Attorney

A medical power of attorney can also be called a durable power of attorney for healthcare or a healthcare proxy. A medical power of attorney can be durable and springing. This means that a healthcare proxy has to have triggering events in order for it to take effect, but it can stay active for a lifetime.

Contact an Estate Planning Attorney Today

Power of attorney is an important aspect of estate planning. Designating a power of attorney can help you be confident that your wishes will be followed if you are unable to make the decisions yourself.

It’s important that you’re aware that a will and power of attorney are different. Power of attorney takes effect while you’re alive to make sure that your wishes are followed. You should have power of attorney and a will in place to make sure that your wishes are followed.

Contact Jason Campbell today to learn more about power of attorney and how we may be able to help you.