We are often asked about powers of attorney and why is it necessary to sign one when the client is healthy. Furthermore, the disclosure on the first page of the power of attorney frightens people. Clients ask, “Is this really effective immediately? Can’t we make it effective only upon my disability? May I limit the power that my agent has so they can only access some of my assets but not all of them?” Following is a brief explanation of powers of attorney and their uses and purposes.
Powers of attorney are a very important estate-planning tool. We recommend that all of our estate planning clients sign a power of attorney. Often these are signed at the same time that the client signs a will. We further recommend that it be reviewed and updated every five to ten years or sooner if there has been a significant change of circumstances. Our office recommends the use of a general durable power of attorney that covers both financial matters and health care matters. It is general in the sense that it gives to the agent (the person given the power of attorney) the power to do anything that you could do. If you are in the hospital, we need someone to pay your bills, handle you financial affairs, talk to your doctors, authorize medical treatment, and be your advocate.
A partial listing of matters covered by a power of attorney includes the following: making health care decisions including surgical and medical decisions; talking to your doctors about your health without violating the HIPPA privacy provisions; making hospital, rehabilitation and nursing home decisions, paying bills; handling the disposition of real and personal property; and handling tax return filings. On some occasions, we use a separate power of attorney for medical matters and a separate power of attorney for financial matters. This may be necessary if we want to give one child or perhaps a bank the power over financial matters and another child with power to make medical and health care decisions.
The problem with waiting to sign a power of attorney until you need a power of attorney is that it may be too late. You may be unable to sign the power of attorney when it is imperative to have one. If this happens, it may be necessary to go to court and have a court appoint a guardian to do the very things that the power of attorney could have done. The court appointed guardian might not be the person you had planned on as your power of attorney. I t may be a professional guardian or a bank.
We discourage the use of a power of attorney that does not become effective until a disability. This document, known as a Aspringing power of attorney@, is difficult to use. The determination as to whether the triggering event has happen may require the use of the court system causing unnecessary expense and delay.
It may make sense to name an alternate in case the person you have names as your power of
attorney is unable to act. It may also make sense to name more that one person as a power of attorney so that both have to agree and act together.
A separate related document that may also be signed is an Advance Directive for Healthcare, commonly referred to as a Living Will. This document is signed by you expressing your wishes in the event you become terminally ill or are permanently unconscious and any further treatment serves only to prolong the dying process. You have the opportunity in this document to name a surrogate to enforce your wishes and become your spokesperson.
Our office can provide advice and guidance on these important documents and see that they are properly executed. Please call our office to make an appointment for further information.
Copyright 2012 by Stone LaFaver & Shekletski