When you care for an aging loved one, you take on a number of daily responsibilities. These include assisting in transportation, managing medications, and helping out with household chores. Additionally, a time may come when you are asked to make important financial decisions, donate gifts of money, make crucial healthcare decisions, and recommend a guardian on behalf of another. For decisions as important as these, a power of attorney could be necessary.
The power of attorney is a privilege given to an individual to act on behalf of another in a specified legal or financial matter. Most people have or will deal with a power of attorney issue at some point in their life. However, there is confusion among some people about what this power entails, what it does not, and how it is granted.
At its core, a power of attorney is a legal document that allows an individual – the principle – to appoint another person – an agent – to act for them should they ever become unable to do so. This agent is expected to follow the instructions and pursue the goals of the principle. Because of this, it is imperative that the person given this power is a trusted one.
A common misconception about a power of attorney is that there can be only one. In theory, you could have a power of attorney for every area of your life that you deem appropriate. This would be known as a special or limited power of attorney. However, most people assign a general power of attorney for financial decisions, and a general power of attorney for health decisions.
Another misconception about a power of attorney document is that you may sign such a document if you are legally incompetent. This is not the case. To execute any legal document, you must be legally competent. Insurance statistics show that one out of every two people will suffer a period of prolonged incapacity at some point in their lifetime. If an individual becomes incompetent and does not have a power of attorney document signed, it can be cumbersome and expensive for the court to appoint a guardian for them. This is why it is crucial that people have a power of attorney document signed ahead of time.
If you are designated as the agent for someone’s power of attorney, make sure to read the document carefully to see which actions you may take on behalf of the principal. It is important to know that, as an agent, you are what the law calls a “fiduciary.” This means that you have a legal duty to act in the highest good faith for the benefit of the principal. It is also important to know when your responsibilities as an agent come into effect. While some power of attorneys provide for immediate authority, some documents provide for “springing power,” which grants authority to act only if the principal has been deemed incapable of doing so.
Powers of attorney and other advance directive documents should be reviewed periodically to be sure that they still reflect the wishes of the author. If a change needs to be made, it is important to consult with an attorney to ensure that problems do not arise when the time comes that the document is to be enforced. By preparing these power of attorney documents before you need them, you can save your loved ones a great deal of potential stress and heartache.
Whether you are a principle seeking to assign an agent a power of attorney or an agent who has been entrusted to act as a power of attorney, it is important to have a lawyer review things for you. At Levine Lyon & Eisberner LLC, we include advanced directives in our estate plans for clients, and we are happy to draft and/or review your power of attorney documents.