the power of the poa
The Power of Attorney as it relates to estate planning can be a stressful topic to broach. It is hard to have a discussion with a parent who is used to taking care of you, how things should go when the roles are reversed and you as the child becomes the caretaker. Even though you may not be willing to have the conversation, you should.
The (POA) does two very important things; it provides an easy transition to enable you to care for your loved one in the event that they cannot take care of themselves and also allows you the benefit of ensuring that the estate remains fiscally sound.
It is a legal document that grants you the authority to act on someone else’s behalf in legal, financial, or health matters. The person granting the power of attorney is known as the "principal" or "grantor," while the person receiving the authority is referred to as the "agent" or "attorney-in-fact."
Types Of POA
General Power of Attorney: This grants broad authority to the agent to handle various financial and legal matters on behalf of the principal. It is often used when the principal will be unavailable or unable to handle their affairs due to travel, illness, or other reasons.
Special or Limited Power of Attorney: This grants the agent authority to perform specific tasks or make specific decisions on behalf of the principal. It is often used for a particular transaction or during a specific period of time.
Durable Power of Attorney: This remains effective even if the principal becomes incapacitated or unable to make decisions. It is typically used for long-term planning, such as appointing someone to handle financial affairs in case of illness or disability.
Medical Power of Attorney (Healthcare Proxy): This specifically grants the agent authority to make medical decisions on behalf of the principal if they become incapacitated and unable to communicate their wishes.
When the unthinkable happens and you are scrambling for answers not everyone will be on your side. For all intents and purposes you are a stranger no matter what your relationship is to an agent on the other end of the call. Imagine trying to find out a mortgage balance, or trying to pay a delinquent credit card, or trying to sort out medication, or trying to collect documentation for tax season, or trying to renew pension contribution statements, or trying to ensure bank accounts are not in the red because your loved one has simply forgotten. If you think that folks will be sympathetic to your situation think again. They will simply express that they understand, but that nothing can be done without a signed and notarized Health Proxy and/or Power Of Attorney.
The process may seem daunting, but take it step by step. Have these conversations early. Discuss what is comfortable for each party. Requirements vary from state to state. You can download approved forms from your state’s bar association website, you can also speak directly with an estate attorney especially when dealing with larger families and multiple siblings. Organizations like Legal Shield, can provide you with free or affordable help in executing the correct documents appropriately.
The Power Of Attorney is like any kind of insurance policy. You hope you will never need it; however it is a protective safety net once in place and it can ease extremely stressful situations.
