Do you know what will happen to your estate if you are incapacitated or unable to make a decision?
When it comes to your estate plan, a well-drafted power of attorney is crucial to ensure all your assets are taken care of. This is a very important life decision and should be handled with care and efficiency. Therefore, we’ve answered some of the most common questions surrounding a power of attorney to provide you with as much knowledge as possible.
What is a Power of Attorney?
A power of attorney is a document that allows you to appoint a person or organization to make medical and financial decisions on your and your estate’s behalf if you are unavailable or unable to do so.
The person you designate as your power of attorney is called an “attorney-in-fact” or “agent”, and you are referred to as the “principle”.
Why do I need one?
A power of attorney ensures that decisions about your health and finances are handled according to your wishes without interference. Without an agent, courts may choose to establish a guardianship lawyer or conservatorship to manage financial or health matters. Though it is the job of a court-appointed guardian to ensure basic needs are met, a power of attorney is the best way to ensure everything is handled the way you want it to be.
It also helps to prevent any questions or concerns about the principal’s intentions, as well as conflict between family members.
Who do I designate as my agent?
You may designate anyone to be your attorney in fact. However, it is very important that you choose someone you can fully trust, because your agent will have access to your money and assets as soon as the power of attorney takes effect which happens after the document is signed before two witnesses and notarized. However, you can choose to use a “springing” power of attorney which only takes effect if you are incapacitated.
Will I still have control of my money after giving someone power of attorney?
Yes, though your agent will have access to your money.
What do I do if I suspect my agent is stealing from me?
If you think your agent is stealing from your estate, you should revoke the power of attorney and notify any financial institutions that you have done so. You can then proceed to take legal action.
There are few comprehensive statistics tracking power-of-attorney, but the MetLife Mature Market Institute, a research unit of insurer MetLife Inc., in 2009 put the annual financial loss suffered by victims of elder financial abuse, including exploitation of powers of attorney, at $2.6 billion.
How do I draft my power of attorney?
There are a few different ways you can go about drafting your power of attorney, but the best option is to use a licensed lawyer.
A national survey conducted by the Joint Editorial Board for Uniform Trust and Estate Acts found that a majority of respondents had difficulty obtaining acceptance of powers of attorney. 63% reported occasional difficulty and 17% reported frequent difficulty.
Using a professional lawyer is the most secure way to ensure a complete power of attorney that fits all your needs.
No one has the ability to predict what circumstances they may fall into at some point and in turn which powers will be needed to resolve them. Granting an agent power of attorney can lessen the burden on family members who would otherwise need to go to court to handle the affairs. A trusted agent will not prevent principals from performing these functions but will ensure they complete whatever tasks need resolution.