If you are not able to communicate your health care choices due to an accident or chronic illness, how do you know which choices will be made? Who will make legal and financial decisions for you? The best way to preserve your wishes and to assign a decision maker is through a power of attorney.
What is a health care power of attorney?
A health care power of attorney is used for medical decisions such as health care, hospital, and life support. The health care agent is authorized to make a wide range of decisions ranging from treatment and surgical choices to long term care options, so it is important for all advance health care directives to be clearly communicated.
What is a financial power of attorney?
A financial power of attorney gives another person the authority to make financial decisions for you while you are unavailable or incapacitated. The financial agent is authorized to act on behalf of the principal when conducting financial and legal affairs such as paying bills, conducting business transactions, or signing legal contracts.
There are two different ways of writing power of attorney documents regarding when they become active:
- With a durable power of attorney, the document becomes effective immediately once the principal signs it and continues to be effective should you become incapacitated.
- With a springing power of attorney, an agent is named in advance, but does not have legal authority for decision making until the principal becomes incapacitated
Challenges of a springing power of attorney
The challenge with a springing power of attorney is that the document must be very specific about what type of event will allow the agent’s powers to “spring” into effect. If it isn’t extremely clear, the family may have to spend precious time in court determining if the conditions for incompetency are met.
No matter which type of power of attorney you choose, remember that it is a sweeping and powerful document, and careful consideration should be applied to the selection of your power of attorney agent, as you are placing a lot of trust in that person.
In an estate plan, the trustee will typically serve as the agent in charge of financial decisions if you become incapacitated. However, most people do not put all of their property into an estate plan, so a power of attorney is important for those assets as well.
We assist clients in making thoughtful and informed decisions about their estate plans as they plan for their family’s future. We have helped numerous individuals and businesses design estate plans, asset protection plans, and power of attorney documents that meet their needs, protect their families, and affirm their legacies.