WHY YOU NEED TWO KINDS OF POWER OF ATTORNEY DOCUMENTS Wills and trusts are used to establish directions about what should happen to your property upon death and who you want to carry out those directions, explains an article from Coeur d’Alene/Post Falls Press, “Power of attorney documents come in two main varieties—do you have both?” However, the estate planning documents addressing what you want while you are still living but have become incapacitated are just as important. To some people, they are more important than wills and trusts.
A comprehensive estate plan should address both life and death, including incapacity. This is done through Power of Attorney documents. One is for health care, and the other is for financial and legal purposes.
A Power of Attorney document is used to name a decision maker, often called your “Agent” or “Attorney in Fact,” if you cannot make your own decisions while living. You can use the POA document to state the scope and limits the agent will have in making decisions for you. A custom-made POA allows you to get as specific as you wish—for instance, authorizing your agent to pay bills and maintain your home but not to sell it.
The financial POA document gives the chosen agent the legal authority to make financial decisions on your behalf. In contrast, a Health Care Power of Attorney document gives your agent the legal authority to make healthcare decisions on your behalf.
By having both types of POA in place, a person you choose can make decisions on your behalf.
WHY YOU NEED TWO KINDS OF POWER OF ATTORNEY DOCUMENTS
Suppose you become incapacitated and don’t have either Power of Attorney documents. In that case, someone (typically a spouse, adult child, or another family member) will need to apply through the court system to become a court-appointed “guardian” and “conservator” to obtain the authority the Power of Attorney documents would have given to them.
This can become a time-consuming, expensive and stressful process. The court might decide the person applying for these roles is not a good candidate, and instead of a family member, name a complete stranger to either of these roles.
The guardianship/conservator court process is far less private than simply having an experienced estate planning attorney prepare these documents. While the records of the legal proceedings and the actual courtroom hearings are often sealed in a guardianship/conservatorship court process, there is still a lot of personal information about your life, health and finances shared with multiple attorneys, the judge, a social worker and any other “interested parties” the court decides should be involved with the process.
For peace of mind, having an experienced estate planning attorney prepare these documents when creating or updating your estate plan is a far better way to plan for incapacity.
Schedule your phone meeting- THE LAW OFFICES OF CLAUDE S. SMITH, III
WHY YOU NEED TWO KINDS OF POWER OF ATTORNEY DOCUMENTS
Reference: Coeur d’Alene/Post Falls Press (Oct. 11, 2023) “Power of attorney documents come in two main varieties—do you have both?”
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