Power of Attorney
Your Most Important Legal Document
You don't want to mess this up!
If you do not do any other estate planning, do yourself and your family a favor by sitting down with an Elder Law attorney and execute a durable power of attorney (POA). Is there a difference between POA documents? YES! There are literally millions of different kinds of POAs in the world. The kind of POA document you will get at the bookstore vs what an Elder Law attorney will provide you are vastly different.
If you are over the age of 18, you need to be thinking about a solid estate plan. An "estate plan" consists of more than just a trust and/or a will. For those over the age of 50 a solid estate plan should provide real protection for you if you become incapacitated. An estate plan should include, at minimum, a Will, Power of Attorney, and Advance Directive.
Why do I need a Power of Attorney?
The national statistics are in and the mortality rate is going up. We are all living longer lives! However, many of us are not living better lives. Alzheimer's and Stroke are in the top ten causes of death in the United States. There is a high likelihood that if you live past the age of 70 you will become incapacitated. A POA will allow another person, maybe a spouse, or son/daughter, to not only sign on your behalf but make financial decisions for you. If you become incapacitated and do not have a POA, your loved ones will likely need to have the court appoint a Guardian and Conservator over you and your estate. This means that for the rest of your life, the court will have direct supervision over where and how you live. This also means that for the rest of your life you will be paying attorneys fees and court costs! This may amount to tens of thousands of dollars. In comparison, a properly drafted POA can be purchased for a few hundred dollars.
What should my Power of Attorney be able to do?
Most people understand that a power of attorney will allow another person to sign on your behalf. But did you know that your agent cannot simply sign anything and everything? An agent under a POA can only do those things that are explicitly stated in your POA document. That is to say, if the POA does not specifically say your agent can manage your investment accounts, then your agent can NOT manage those accounts. A power of attorney document can and should do far more than simply allow your agent to manage your bank accounts or pay your bills. At minimum, a solid power of attorney should allow your agent to do the following:
1. manage bank accounts;
2. manage investment accounts;
3. manage retirement accounts;
3. manage your real property;
4. qualify you for government benefits;
5. protect your spouse against impoverishment;
6. enter into financial obligations on your behalf;
7. and so much more!
Real world experiences.
I cannot stress enough how important a POA document is. A properly drafted POA should allow your agent to qualify you for Medicaid benefits. When we are helping clients to qualify a spouse for Medicaid, the first thing we ask for is a POA. Not all situations dictate needing a POA, but if the spouse is incapacitated, POA is mandatory. Unfortunately, more often than not, our clients bring in POA documents that were bought in the book store or prepared by an attorney who does not practice Elder Law. These documents are almost always lacking essential clauses that help us to protect our clients. In addition, many of these documents have a provision that is often referred to as a "springing power of attorney." A Springing POA means that the document requires that the principle be declared incompetent before the agent can act. It is often difficult to get a doctor to declare their patient incompetent. This means that we have a lot of adults who are needing help but their families are unable to provide it.
If you are concerned about capacity because of Parkinson's, Alzheimer's, Stroke, or any other reason, do not put your peace of mind in the hands of an online company or the bookstore. Please see an experienced Elder Law Attorney right away. If you have signed a POA and are wondering if it is good enough, please call us for a review of your estate plan. We are happy to help.