POWERS OF ATTORNEY
Powers of attorney keep you always in control.
Everyone is familiar with the concept of designating a proxy. We’ve done it our entire lives – from when we were children and our parents tells us to watch our younger siblings (and trying to leverage that authority for all it’s worth!) to when we give another person authority to cast a vote on our behalf. Powers of attorney serve this crucial purpose in your estate plan.
Powers of attorney are a too-often overlooked aspect of a fully articulated estate plan and no less important than a Will or Revocable Living Trust. Having the right powers of attorney in place ensures that you family or chosen representatives have the authority to act on your behalf if you are unable to do so for yourself. They give your proxy (your agent, or “attorney-in-fact” if you want to use the jargon) the authority to act on your behalf within limitations you have set forth in the power of attorney.
Your estate plan isn’t only – or even primarily – about what happens when you pass away. Your powers of attorney are designed to protect you while you are living, to help ensure that you retain say and control over your own life even in situations where you may be incapacitated or unable to make those decisions in-the-moment.
Your financial and health care powers of attorney ensure that your wishes are carried out even if you are not able to make the decision in the moment.
Financial Powers of Attorney
Financial powers of attorney authorize your agent to act on your behalf for nearly anything expressly set forth in the power of attorney, including financial and business transactions, business interests, life insurance claims, property transactions, etc.
A financial power of attorney – usually, but not always a durable power of attorney – is a component of every good estate plan. Depending on how you draft your power of attorney, it may be springing (meaning that it only becomes effective if you become incapacitated) or effective at signing. It’s important to ensure you empower the right team to take care of you rather than rely on a judge to appoint members of the team.
Health Care Powers of Attorney
A health care power of attorney is a critical part of every estate plan. It authorizes an agent to make health care decisions on your behalf. Several types of health care decisions are usually authorized, including medical treatment, selection of doctors, living arrangements / nursing home placement and other decisions related to your physical person and well-being.
Most powers of attorney are “springing” powers, requiring a declaration of medical incapacity before the agent has any authority. Health care powers of attorney, however, are frequently effective immediately, especially if the principal is older or has a known medical condition. A durable health care power of attorney avoids the need to have a guardian appointed if you become incapacitated.