Powers of attorney (“POAs”), perhaps the most valuable documents in your estate plan, are commonly overlooked or misunderstood.
POAs allow you, the “Principal”, to give someone, your “Attorney-in-Fact”, the legal ability to act on your behalf when you are unavailable (i.e., traveling) or unable to do so (i.e., ill or incapacitated). Your Attorney-in-Fact should be someone you trust to handle your affairs and respect your wishes.
POAs are often confused with wills but are different in that they only apply during your lifetime; whereas, a will applies when you die. Thus, POAs are like the lifetime counterpart to a will.
There are two kinds of POAs: (1) property and (2) healthcare. A property POA gives your Attorney-in-Fact the right to perform necessary tasks to manage your property, real and personal. A healthcare POA authorizes your Attorney-in-Fact to make decisions regarding hospitalization and long-term care when you are incapacitated.
One interesting aspect of the healthcare POA is that you can mandate a particular plan of care. For instance, you can authorize your Attorney-in-Fact to withhold all life-sustaining procedures, including nutrition and hydration, allowing you to die naturally, without delay. This can ensure your wishes will be respected and can give your family some peace of mind that they will not be left with the burden of making these difficult decisions.
In the absence of POAs, you risk having your affairs managed by a court-appointed guardian, or sending your family to court to obtain the authority to handle your affairs. This process can be time-consuming, slow and expensive, especially when compared to the minimal cost of havingPOAs drafted by an attorney. Think of the proverbial “ounce of prevention”.
Your estate plan should include tools not only for after your death, but also during your life. It is important to thoughtfully and responsibly prepare for the possibility of illness and incapacity and POAs are a simple, economical way to accomplish that.
Should you have a question or would like to discuss your estate plan, please contact Holly Marcum.