There are many unexpected ups and downs in life. Having an estate plan in place is how responsible adults do their best to protect themselves and their families, according to The Villager, in a recent article, “Power of attorney protects loved ones.”
A power of attorney (or “POA”) is a document that allows someone to designate a person or organization to manage his or her affairs in the event he or she is unable to do so. The specific laws for creating a power of attorney vary by state, but there are some basics common to all.
Without a POA for financial, medical, and other pertinent information, family members may be unable to act without court intervention. In those cases, the state may appoint a person to make decisions for an individual, if there is no POA.
The main types of POA are the general power of attorney, health care proxy, durable power of attorney and special power of attorney. While some of the responsibilities in these documents can overlap, there are some legal differences. A durable power of attorney concerns all of the appointments involved in general. The document will remain in effect or take effect if a person becomes mentally incompetent. Certain powers of attorney can terminate at a specific time.
Depending on the terms of the document, an agent appointed through a power of attorney may make decisions in the following areas for an incapacitated individual: banking, the sale or purchase of property, filing tax returns, coordinating government-supplied benefits, deciding medical care and making estate-planning decisions. That can allow loved ones to pay the bills or pay for your care if you’re unable.
A power of attorney can be straightforward, but it’s most effective as part of an overall estate plan and when it’s submitted to your financial institutions in advance of any crisis situation. Certain financial institutions have idiosyncrasies when accepting powers of attorney. They may require a POA be submitted on their own form, or you might have to work with a legal department to get it accepted. In either case, an experienced estate planning attorney will be able to help, and it’s better to find out now whether the institutions you work with will accept your POA.
However, even a POA isn’t a catch-all. In order for your loved ones to get access to your medical records or speak to your medical professionals on your behalf, they’ll need a HIPAA release. Without it, your doctors could refuse to give information to your designated decision maker without court intervention.
While it’s not a fun conversation, it’s crucial to talk to your loved ones about your wishes in advance. At Family Estate Planning Law Group, we strongly encourage our clients to hold a Family Care Meeting to outline the estate planning you’ve done and the roles and responsibilities given to your loved ones. We regularly help clients discuss this with their families, and find it makes everyone more comfortable with their roles in the estate plan.
We all hope we’ll never become reliant on a loved one, especially due to an accident or disease. However, it pays to be prepared. For more information on the importance of planning for incapacity, explore our website and contact us to schedule your consultation today!
Reference: The Villager (December 14, 2016) “Power of attorney protects loved ones”