Power of Attorney
When clients think about estate planning, they usually focus on their Will and what happens to their assets when they pass. But, an equally important task is to consider what happens to their finances if they are incapacitated during their lifetimes. For example, what if they are diagnosed with dementia or Alzheimer’s? Similarly, who will speak on their behalf if they can’t tell their doctor what kind of medical treatments they want to undergo or avoid? As part of their plan, we provide two different documents to address this: a Financial Durable Power of Attorney and a Health Care Power of Attorney. In both, the client names an Agent to act on their behalf. If married, usually their spouse is designated. An alternate Agent is also named in case their first choice can’t act. The Financial Power of Attorney gives the Agent broad powers, including the power to access accounts, sell or borrow against assets, continue their pattern of gift giving and the like. It can be made effective upon signing or only when a doctor signs a statement that they are unable to manage their affairs. The Health Care Power of Attorney allows the Agent to provide informed consent to treatment. It also works hand in hand with a Health Care Directive to implement the client’s wishes to avoid heroic measures. In addition, it gives the Agent the right to talk to the doctor and access health care information about the client so that the Agent can make informed decisions.
Insights
What happens if someday I can’t make decisions for myself?
If you become incapacitated, whether because of illness, dementia, an accident or some other cause, someone else may have to make decisions for you. The best option is to have chosen in advance a person you trust to make those decisions in a Power of Attorney document. If you are truly incapacitated and have no Power of Attorney documents, you might need to have a guardian appointed. Guardianship is a lengthy, expensive, uncomfortable process in which a judge makes the final decision. To avoid that, we highly recommend our clients execute Power of Attorney documents: one for their finances, and one for their health care. In fact, we believe they are often more important than having a Will or Trust. Because Powers of Attorney can be abused, you should work with a careful attorney in creating your documents.
