Top 10 ReasonsApril 16th, 2013 | written by Nancy Larson
The Top 10 Reasons To Execute a Power of Attorney
By: Heidi Dodd
The benefits of a highly detailed, comprehensive power of attorney are numerous. Unfortunately, many powers of attorney are more general in nature and can actually cause more problems than they solve, especially for our aging population. It is important to choose a reliable and honest agent.
The agent under a power of attorney has traditionally been called an “attorney-in-fact” or sometimes just “attorney.” The “principal” is the individual who has appointed the agent to represent him or her.
Powers of attorney are voluntary delegations of authority by the principal to the agent. The principal has not given up his or her own power to do these same functions but has granted legal authority to the agent to perform various tasks on the principal’s behalf. A “durable” power of attorney allows principals to include in their powers of attorney a simple declaration that no power granted by the principal in a power of attorney will become invalid upon the subsequent mental incapacity of the principal.
Let’s review the top 10 reasons to execute a property power of attorney:
1. Provides the ability to choose who will make decisions for you (rather than a court).
If someone has signed a power of attorney and later becomes incapacitated and unable to make decisions, the agent named can step into the shoes of the incapacitated person and make important financial decisions. Without a power of attorney, a guardianship may need to be established, and can be very expensive.
2. Avoids the necessity of a guardianship.
Someone who does not have a power of attorney at the time they become incapacitated would have no alternative than to have someone else petition the court to appoint a guardian. The court will choose who is appointed to manage the financial and/or health affairs of the incapacitated person, and the court will continue to monitor the situation as long as the incapacitated person is alive. Unfortunately, an incapacitated person has no input on who will be appointed to serve on their behalf.
3. Provides family members a good opportunity to discuss wishes and desires.
There is much thought and consideration that goes into the creation of a comprehensive power of attorney. One of the most important decisions is who will serve as the agent. When a parent or loved one makes the decision to sign a power of attorney, it is a good opportunity for the parent to discuss their wishes and expectations with the family, especially the agent.
4. The more comprehensive the power of attorney, the better.
As people age, their needs change and their power of attorney should reflect that. Seniors have concerns about long-term care, applying for government benefits to pay for care, as well as choosing the proper care providers. Without allowing the agent to perform these tasks and more, precious time and money may be wasted.
5. Prevents questions about principal’s intent.
Many of us have read about court battles over a person’s intent once that person has become incapacitated. A well-drafted power of attorney, along with other health care directives, can eliminate the need for family members to argue or disagree over a loved one’s wishes. Once written down, this document is excellent evidence of their intent.
6. Prevents delays in asset protection planning.
A comprehensive power of attorney should include all of the powers required to do effective asset protection planning. If the power of attorney does not include a specific power, it can greatly dampen the agent’s ability to complete the planning and could result in thousands of dollars lost.
7. Allows an agent to enter into a care agreement.
Most of us want to age in place in our homes. Allowing your agent the authority to enter into a contract on your behalf to provide care for you through a home healthcare agency or a family member as a caregiver is critical.
8. Allows agents to talk to other agencies.
An agent under a power of attorney is often in the position of trying to reconcile bank charges, make arrangements for health care, engage professionals for services to be provided to the principal, and much more. Without this authority, many companies will refuse to disclose any information or provide services to the incapacitated person. This can result in a great deal of frustration on the part of the family, as well as lost time and money.
9. Allows an agent to assist in qualifying for government benefits.
In the event you need to enter into assisted living or a long-term care facility, it is important that your agent have the authority to assist in qualifying you for any government benefits such as Medicaid and veteran’s benefits.
10. Provides peace of mind for everyone involved.
Taking the time to sign a power of attorney lessens the burden on family members who would otherwise have to go to court to get authority for performing basic tasks, like writing a check or arranging for home health services. Knowing this has been taken care of in advance is of great comfort to families.
Which benefits are most important depends on the situation of the principal and their loved ones. This is why a comprehensive power of attorney is so essential: Nobody can predict exactly which powers will be needed in the future. The planning goal is to have a power of attorney in place that empowers a succession of trustworthy agents to do whatever needs to be done in the future.