You may have heard the term Power of Attorney but wonder what exactly it entails and whether you or a loved one should get one. There are four different types of power of attorney documents, each with a different purpose, but they all work together to allow your wishes to be respected in case you are unable to speak for yourself. The estate planning attorneys at Amicus Law Firm explain in more detail what a P.O.A. can do and why it might be a good choice for you and your loved ones.
What is a Power of Attorney?
In simple terms, a power of attorney is a legal document in which you authorize someone you trust to make important decisions on your behalf if you are unable to speak for yourself due to temporary or permanent incapacitation. You can give this person (your agent) permission to take care of important legal matters for you.
The P.O.A. does not give your agent unlimited power to act as he or she pleases, but instead, it outlines a list of responsibilities that your agent is expected to fulfill once the document goes into effect. A P.O.A. does not go into effect until the principal (the person who wrote the document) becomes incapacitated due to an accident or simply as a result of aging.
What is the Difference Between a Power of Attorney and a Healthcare Directive?
You may have heard both terms used interchangeably, but the truth is a Power of Attorney and a Healthcare Directive are not the same, but these documents work together to protect your wishes when you cannot speak for yourself. There are three types of Power of Attorney documents:
- A financial power of attorney gives your agent the authority to handle all your financial matters, from paying bills to selling real estate. You may have your agent perform simple tasks for you, such as depositing Social Security checks, or more sensitive matters such as filing your tax returns.
- A healthcare power of attorney enables your trusted person or agent to make medical decisions on your behalf. Your healthcare agent will work with doctors and medical facilities to ensure you receive the type of treatment and care you wish. A healthcare directive is often used in conjunction with a living will.
- A mental health power of attorney allows the agent to work with medical professionals to decide whether the principal requires inpatient treatment at a mental health facility.
All of these documents work together and can be part of a durable power of attorney (meaning they become active as soon as you lose your capability of making decisions) or can be also made ordinary or nondurable (meaning they become inactive when you lose your mental capabilities).
What are the Duties and Limitations of a Power of Attorney?
The main duty of an agent entrusted with a power of attorney document is to act in the best interest of the principal. This means that the agent cannot use his or her authority to make financial decisions solely for his or her own gain and has a fiduciary duty to only act on the principal’s behalf. The agent can have access to the principal’s bank account and financial assets and handle rent or mortgage payments, but never use the principal’s bank account for their own personal interests.
As far as limitations, a Power of Attorney document must be signed by the principal while he or she is in full control of their mental capacities, otherwise, it can be deemed invalid by state laws. If the principal became incapacitated before signing a P.O.A., the family will likely need to go to court and obtain a guardianship before making any financial or medical decisions. In addition, the authority given to a P.O.A. agent ceases as soon as the principal dies, with the exception of the authority to make decisions regarding the principal’s remains if that is included in the healthcare power of attorney.
Another important consideration is picking the right person to be your agent. Make sure you are choosing someone who understands their duties and limitations and who has the right skills to handle your healthcare and financial decisions on your behalf. You may choose a different agent for each type of power of attorney, as long as every agent understands they need to be willing and able to handle responsibilities and be ready to provide long-term care when needed.
Can You Get Power of Attorney Without a Lawyer?
The internet has made it easy for anyone to draft their own power of attorney documents, and while you are not required to hire an attorney in order to write your P.O.A. documents, it is highly recommended you do so. An experienced estate planning attorney can help review your documents, point out mistakes and inconsistencies and help you avoid unnecessary headaches and arguments among your loved ones in the future by making sure your P.O.A. documents are written clearly.
In addition, an attorney can help tailor your power of attorney documents to your specific situation, update them as needed and give you more peace of mind than if you simply downloaded something from a free website. The estate planning attorneys at Amicus Law Firm have the knowledge and skills to help you at every step of the way, from the initial draft of your P.O.A. to selecting an agent and signing your documents. Contact us today to get started!