What is a Power of Attorney?
Imagine having a trusted person who can step in and handle your most important decisions when you can’t. That’s exactly what a power of attorney (POA) does. It’s a legal document that lets you choose someone to manage your finances or make healthcare decisions on your behalf. Most people create separate POAs for finances and healthcare, and you can even choose different people for each type.
Types of Powers of Attorney
Durable Power of Attorney
You might hear financial powers of attorney called a durable power of attorney. The word “durable” is key here – it means the document remains valid even if you become incapacitated. Think of it like a safety net that doesn’t disappear when you need it most.
While most POAs are durable, there are times when you might need a temporary, non-durable version. For example, if you’re going on an extended vacation and want someone to manage a specific property matter, you can create a time-limited POA.
Healthcare Power of Attorney
Your healthcare power of attorney is typically a durable document, often called an Advance Health Care Directive. It’s your way of ensuring someone you trust can make medical decisions if you’re unable to do so yourself.
What Can a Power of Attorney Actually Do?
Let’s break down the real-world powers you can grant:
Financial Power of Attorney Abilities
A financial POA can help with:
- Managing your bank accounts
- Paying your bills
- Filing your taxes
- Buying or selling property
- Handling your investments
- Collecting important benefits or insurance money
Healthcare Power of Attorney Abilities
Your healthcare agent can:
- Make critical medical treatment decisions
- Choose healthcare providers
- Access your medical records
- Make end-of-life care choices
- Select rehabilitation or long-term care facilities
The Potential Downsides of Power of Attorney
It’s not all straightforward. There are some important considerations:
- Potential for Misuse: Unfortunately, not everyone will act in your best interests.
- Loss of Personal Control: Once activated, your ability to make decisions can be limited.
- Family Tensions: Choosing an agent can sometimes create unexpected family conflicts.
- Financial Risks: A poor choice could lead to costly mistakes.
Responsibilities of Being an Agent
If someone chooses you as their power of attorney, it’s a big deal. You’re not just a stand-in – you’re a fiduciary with serious obligations:
- Always act in the person’s best interest
- Keep detailed, transparent records
- Protect their assets
- Make decisions they would make themselves
Choosing the Right Power of Attorney
There’s no one-size-fits-all approach. Most people benefit from:
- A durable power of attorney that remains effective if you become incapacitated
- A comprehensive financial POA
- An advanced healthcare directive
Practical Steps to Set Up Your POA
Getting a power of attorney isn’t complicated, but it does require some careful steps:
- Have the document notarized (especially for property-related powers)
- Provide copies to your chosen agent and healthcare providers
- Keep the original in a safe, accessible place
- Communicate your wishes clearly with your agent
Final Thoughts
A power of attorney isn’t about giving up control – it’s about ensuring your wishes are respected, even when you can’t speak for yourself. It’s a powerful tool of protection and peace of mind.
Need help setting up your power of attorney? Don’t go it alone. Consulting with an estate planning attorney can help you navigate the complexities and create a document that truly reflects your wishes.
The legal team at Naimish & Lewis is ready to support you through this important process.
