Having an adequately planned estate does not only entail planning for death, it also entails and requires planning for events of incapacity—when someone is physically or mentally incapable or unable to do something. One of the best ways that one can plan ahead for events of incapacity is by executing powers of attorney.
What is a Power of Attorney?
A Power of Attorney is created when one person (referred to as the Principal) gives another person (referred to as the Agent) the ability to make decisions on their behalf, in the event that the Principal is unable to make them.
What types of Powers of Attorney exist?
Here at Batson Nolan, we generally include two different kinds of Powers of Attorney in our Estate Planning package: a Financial Power of Attorney and a Power of Attorney for Health Care. However, there are also a couple of specific Powers of Attorney for special occasions.
Financial Power of Attorney
A Financial Power of Attorney is a legal document that gives someone the ability to make financial decisions on your behalf, in the event that you are unable or incapable of making them. In this regard, “financial decisions” include any financial decisions that the Principal himself could make, such as writing checks, withdrawing cash, transferring real property, accessing safety deposit boxes, etc…
- Examples. A Financial Power Of Attorney can be used by….
- A son to pay his aging mother’s bills.
- A wife to buy property when her husband is deployed.
- A sibling to help with managing the finances for a sibling who has dementia.
Power of Attorney for Health Care
A Power of Attorney for Health Care is a legal document that gives someone the ability to make health care decisions on your behalf, in the event that you are unable or incapable of making them. In this regard, “health care decisions” include any health care decisions that the Principal herself could make, such as receiving medical records, authorizing medical procedures, authorizing the provision of medicines or medical treatment, etc…
- Examples. A Power of Attorney for Health Care can be used by….
- A daughter to access an ailing father’s medical records.
- A husband to authorize emergency surgery for his wife who is in a coma.
- A sibling to assisting another sibling in enrolling into a nursing home.
Limited Power of Attorney for Minor Children
A Limited Power of Attorney for Minor Children is a type of Power of Attorney whereby parents will give an individual(s) the power to make health care decision for their minor children if they are unable or incapable of making them. We most often use this type of power of attorney when the parents of minor children are going on an extended trip, and they want the caregivers of their children to be able to make emergency health care decisions for them in the event that they unable to be reached to make them. This power of attorney generally includes the same powers as the standard Power of Attorney for Health Care, but is limited in terms of duration.
What are the consequences of failing to execute a power of attorney?
When you execute a Power of Attorney, you are designating who you want to be in charge of making your financial or health care decisions, and who you trust to do what is your best interest. When you fail to execute these documents in advance, a court will appoint someone—someone you might not trust to manage your finances or make your health care decisions—to serve as a Conservator over you. Essentially, it is up to a judge, who does not know you or your family members personally, to decide who is best qualified to make these decisions for you.
If you do not currently have Powers of Attorney executed, do not wait until it is too late. Contact Batson Nolan and set up an appointment with our Estate Planning team, so that you can ensure your estate is adequately planned to provide for events of incapacity.
Call (931) 647-1501 to plan your estate today!