When a loved one suffers a serious injury or illness, the family finds themselves in a stressful and anxious situation. That fear can be magnified dramatically when that loved one failed to create an incapacity plan to ensure that his medical and financial decisions are properly managed during his incapacitation. If you’ve created an estate plan but haven’t yet created a plan to protect yourself during incapacity, now’s the time. During such times, the power of attorney can be key to protecting your interests.
What is the Power of Attorney?
The power of attorney document is a powerful tool that can be used to ensure that there’s always someone with the legal authority to make decisions on your behalf if you ever lose the ability to make those decisions yourself. With the power of attorney, you can designate another person to represent your interests, naming them to serve as your attorney-in-fact. That person is provided with specific or general authority, depending upon the terms of the document you create.
Where incapacity plans are concerned, you should focus on creating the durable power of attorney. A durable POA differs from most general powers of attorney, in that it doesn’t expire when you become incapacitated. The durable power of attorney typically goes into effect when created, and lasts until you are deceased.
Why Do You Need Power of Attorney?
Incapacitated persons who lack basic incapacity planning will have no one to make financial or medical decisions for them once they are found to be legally incompetent. That will leave no one there to sign checks, make bill payments, manage assets, or even make treatment decisions. Contrary to popular belief, even close family members lack the power to just step in and make those decisions.
As a result, that person’s family has no choice other than to seek guardianship through the probate court. That requires them to petition the court, seeking the court’s authorization to serve as the incapacitated loved one’s legal representative. This can be a costly and agonizing process, as the court needs to investigate the case, have the patient examined, and hear testimony from everyone involved, adding to the normal stress of dealing with a sick or injured loved one.
There are also negative consequences associated with guardianship. The court may not even choose a family member to be the guardian. While this is not a common occurrence in most places, it is a distinct possibility – especially in instances where family members disagree about treatment options, financial concerns, and other important issues. That can be problematic since guardianships are expensive even without the guardian’s fees. Court costs, attorney’s expenses, and other fees can add up in a hurry, and all those expenses are charged to the patient’s estate.
Power of Attorney for Finances
The durable power of attorney for finances allows you to name your agent and provide him or her with the necessary authority to represent your interests and make financial decisions on your behalf. You can use the document terms to detail the exact parameters of that power to ensure that the potential for abuse or mistakes is minimized as much as possible. Your agent can do everything from managing your financial assets to buying and selling property. Alternatively, you can limit that power to just a few select and vital financial tasks.
Power of Attorney for Health Care
The power of attorney for health care isn’t always referred to by that name any more, as many states now use the broader term advance directives. Most advance directives have a component that operates in much the same way. With a medical power of attorney, you can designate someone to serve as your healthcare proxy, with all the power needed to make important medical treatment decisions when you can’t make them on your own.
Along with the medical power of attorney, many advance directives also contain a living will. This document provides critical information to let health care providers know about the type of life-prolonging treatment that you are willing to pursue. The living will can help your proxy to avoid any disputes with family members whose opinions on treatment might be at odds with your own.
Your estate planning should include incapacity planning as well to ensure that your assets and interests are protected even when you can no longer protect them yourself. At the Potter Law Firm, our incapacity planning professionals can help to ensure that you have the power of attorney documents you need to complete your personal estate planning effort. To learn how we can help you protect your interests and loved ones, contact us online or call us today at (704) 944-3245 (Charlotte, NC), (606) 324-5516 (Ashland, KY), or (859) 372-6655 (Florence, KY).
- What Are Trusts and Why Do You Need Them? - June 14, 2018
- Why You Need an Attorney to Create a Will the Right Way - June 12, 2018
- North Carolina Estate Tax: Should You Be Concerned? - July 5, 2017