Powers of Attorney
A power of attorney is a legal document which allows the drafter or "principal" to name an agent or "attorney-in-fact" to act on their behalf under certain circumstances. The attorney-in-fact can act on the principal's behalf, and make legally binding decisions. The power of attorney can be granted broadly or in limited situations, such as poor health or unconsciousness. Given the different types and variations of a power of attorney, it is advisable to consult a lawyer with experience in estate planning before drafting one.
Consider these types of powers of attorney:
Durable Power of Attorney. A durable power of attorney comes into effect if the principal becomes physically or mentally incapacitated. This allows the principal to take precautions against the possibility that they will become unable to care for themselves or their estate. A durable power of attorney can therefore depend on certain triggers, such as a medical declaration of mental incapacitation. In some states, a durable power of attorney can serve as an alternative to guardianship.
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Health Care Power of Attorney. This document allows the principal to appoint someone to make health care decisions on their behalf should the principal become unconscious or otherwise unable. In many states, a health care power of attorney can also legally contain instructions on whether to provide life support or other procedures should the principal become permanently ill or unconscious.
Financial or Property Power of Attorney. This legal document is also called a general durable power of attorney. In a property power of attorney, the principal must assign specific powers to the agent. These can include the authority to manage finances, property, taxes, and other actions. However, a financial power of attorney cannot legally give the agent the power to vote, prepare a will, or seek a divorce on the principal's behalf.
State law differs on powers of attorney. The name of these instruments, not to mention their powers, varies, although all states have some provision for these measures. If a person is unable to act on their own behalf and has not completed a power of attorney, a court may find it necessary to appoint a legal agent. Depending on state law, this agent can be called a guardian, conservator, or committee. If a court appoints a guardian, you may not be able to choose who this will be.
Other legal documents such as living wills allow persons to provide instructions about their health care and estate planning. The estate planning process should cover the disposition of assets during your lifetime as well as afterwards. If you are beginning the estate planning process or must have a power of attorney drafted, you should contact an experienced estate planning attorney to protect your assets and fulfill your needs.