A General Durable Power of Attorney is one of four basic estate planning documents I recommend for every client, along with a Last Will and Testament, a Living Will, and a Health Care Power of Attorney. They often ask, “Why do I need a Power of Attorney (POA)? I have all my faculties and am perfectly capable of taking care of my own affairs.” The answer is: that’s exactly the best time to execute one.
Through a General Power of Attorney, you authorize one or more individuals to step into your shoes and take action on your behalf, in your place, as your agent, or “attorney-in-fact.” What can an attorney-in-fact do for you? Just about anything that you can do for yourself. And while you may have no need for that kind of help, that can change in a tragic heartbeat. Now, while you are capable of making an important decision with a clear head, and have the time to do so, is when you should take care of this life planning tool.
You should name at least one person to serve as your agent, and one alternate, to serve in case your first choice is unable to serve. Who should it be? If you are married, it makes good sense to name your spouse. For an alternate, you might name one of your adult children. It could also be a close friend who knows you and your affairs well. The most important characteristic about an attorney-in-fact is that you must have complete trust in them to use this authorization wisely and honorably in their best interest. Someone who is good with money, is organized and keeps good records, lives near by or can be near by quickly, and with whom you have a very strong relationship, is the best kind of individual to name.
You can also name more than one person to serve as your co-attorney-in-fact. This is a good idea not only to engage more of your family, perhaps, equally in your care, but can also provide a check and balance if they are to serve jointly. That way, both all the people you name have to consent to any action taken on your behalf.
A POA is helpful for those unexpected situations – whether from accident or illness – in which you are unable to take action yourself. Maybe you are stuck in a hospital, or are unconscious, or heavily sedated. Under such circumstances, you often still need to take care of your life. With a POA in place, your agent can do that for you. What kinds of actions can a POA undertake for you? Almost anything you can do on your own behalf – everything from banking business to filing your taxes, from entering your post office box to filing a lawsuit on your behalf for injuries you have suffered.
If you wait until you need one, you risk having waited too long. If you are unconscious, or not in a situation to competently act for yourself, you will not be able to execute a POA because you may lack the capacity required to make that decision. At that point, only a court can authorize a person to act on your behalf and in your best interest through a process in Tennessee called a conservatorship.
Conservatorships require a court proceeding and continuous judicial oversight. They are much more costly to set up than a Power of Attorney. In short, having the foresight to execute a Power of Attorney document while you are thinking clearly and able can save your loved ones considerable expense and difficulty in caring for you. It will help them to manage your affairs when you most need it. Do it now, while you don’t!
Please contact us today online or by calling 800.705.2121 to discuss your legal options.