Like many Americans, you may think you have all the time in the world to get your affairs in order, plan how your estate is managed once you’re gone, and ensure that your spouse, children, and other loved ones are properly cared for in your absence. You may even have many of the necessary elements of a comprehensive estate plan already in place. If so, congratulations! However, if you still haven’t taken steps to ensure that decisions can be made for you in the event that you are seriously injured, fall ill, or end up otherwise incapacitated, then you still have some work to do to properly prepare for the unexpected.
The Limitations of Power of Attorney
You might be thinking to yourself, “Wait – I already have a power of attorney assigned. Isn’t that all I need?” The reality is that you may be right; your current power of attorney may be all that you need to ensure that your affairs continue uninterrupted in the even that some unforeseen accident or illness renders you incapacitated and unable to make decisions for yourself. However, there is also a very good chance that your existing estate plan may not properly cover that eventuality.
Here’s the problem: A Power of Attorney (POA) document is a powerful way to assign authority to another person to act on your behalf when you are unable to do so. It can provide authority for that person to handle decisions related to your finances, physical assets, medical concerns, and other important interests. It also comes in a variety of different forms:
- The General Power of Attorney, which provides broad power for your designated agent to basically engage in any legal action you could personally engage in on your own. He or she can open bank accounts, close them, withdraw or transfer money, purchase and dispose of securities, bonds, and other assets, and so on. This is a powerful designation of authority, and is typically only given in rare instances.
- Limited Power of Attorney is used where you want to assign power to an agent to engage in certain, well-defined, and limited acts. You might, for instance, give a friend special authority to receive your paycheck for you while you are out of town, or you could use a special purpose medical POA to allow someone to make important medical decisions for you if you become incapacitated.
- The Springing version of the Power of Attorney comes into play only when you are incapacitated. Basically, it is a dormant power that only comes into effect the moment you are deemed to be unable to manage your own affairs. Because of its complicated nature you will need to take great care to properly define incapacitation.
What is a Durable Power of Attorney?
The fourth type of power of attorney is the Durable Power of Attorney. This authorization empowers your designated agent to make important decisions for you when you are incapacitated. It expires when you die. Durable Power of Attorney documents are a type of advanced directive that can help to ensure that your interests are properly managed when you are no longer able to do so.
What Are the Real Benefits Provided by these Advanced Directives?
Depending on the language used in your Durable Power of Attorney, your agent could have the power to make critical decisions on your behalf that include things like:
- Managing your government benefits – including pensions, Social Security, Medicare, and more
- Making Gifts or donations
- Managing your financial matters – including everything from handling the assets in your retirement accounts to making decisions about investments in stocks, bonds, and other investor assets
- Handling your bill payments to ensure that all of your financial obligations continue to be met in a timely manner
- Serving as your surrogate in any official capacity necessary, including appearing on your behalf in any legal proceedings
- Making important decisions related to your health care, treatment of illness or disease, therapies, life support choices, and even managing your care at the end of your life
Why You Need This
If you only have a general Power of Attorney in effect, then you need to consider something more durable. The fact is that the General Power of Attorney loses its power when you become incapacitated. So, if you have an agent acting with that general authority, he or she will lose that power if you become unable to communicate your desires for any reason. Brain damage, dementia, and other types of incapacitation could all leave you with no empowering Power of Attorney to ensure that your best interests are still being cared for.
The same holds true for the aging process. As you age, you could eventually reach the point where you are unable to manage your affairs due to a loss of mental capacity. Once that happens, it is simply too late to put a Power of Attorney into place. That could require your loved ones to wait for court approval before they can make important decisions related to your health, financial interests, and other critical matters.
Preparing for the Unexpected
In all of these instances, the main problem to overcome is the uncertainty offered by future events. The fact is that few of us get the kind of warning we would prefer to have when it comes to life-altering illnesses and injuries that leave us incapacitated. Moreover, it’s not something that the average person really wants to think about in times of good health. Because of its importance, however, this is an issue that should be addressed during those good times to ensure that your health and well-being – as well as that of your loved ones – can be properly cared for when you lose the ability to manage your own affairs.
The best way to guarantee that your estate plan covers these unexpected complications is to work with a competent and professional legal expert to develop the right Durable Power of Attorney for your unique needs. Robert Kulas Attorneys at Law can provide you with the guidance and expertise you need to make sure that your estate planning is devised with all of these unforeseen possibilities in mind. Contact us today to learn more about how a Durable Power of Attorney can help to ensure that you are properly prepared for the unexpected.