There's a lot of planning and preparation for death. Wills allow you to plan for what happens to your assets when you pass. But what about planning for your lifetime? Measures can be taken to protect yourself, and your assets should you be unable to act. Trusts allow you to plan for your lifetime and death by managing your assets. Powers of Attorney, on the other hand, are a set of instructions that enable a third person to make decisions for an individual and the individual's property during their lifetime when they are incapacitated (i.e., unable to make decisions for themselves).
Use It Or Lose It
Failing to plan for incapacity leaves you at risk of having a stranger make decisions for you when you're unable to make decisions for yourself. The only groups of people during an individual's lifetime who can make decisions for them when they cannot, are those whom the individual appoints and those whom the probate court appoints.
Speaking for myself, I'd rather have someone I know and trust making decisions for me when I can't, rather than a stranger appointed by a court.
There are two types of powers of attorney, (i) one for financial matters and (ii) another for health care matters. Unless stated otherwise in the document, powers of attorney do not expire until the maker does.
Financial Powers of Attorney
A financial power of attorney is a set of instructions given by an individual (the "Principal") that grants a third party (the "Agent" or "Attorney-In-Fact") the ability to make financial decisions on the principal's behalf. For example, the agent can pay bills, close a bank account, cancel a cable bill, among other things. These decisions can be tailored to the principal's choosing.
Having a correctly drafted financial power of attorney is crucial to avoiding a conservatorship (a court process of appointing someone to handle the individual's property and financial affairs if they cannot make decisions for themselves). Obtaining a conservatorship means going to court, which costs time and money. With a properly drafted financial power of attorney, an individual that becomes incapacitated will have an agent of their choosing making decisions instead of a conservator appointed by the court. Thus, control is retained by the principal.
Health Care Powers of Attorney
A health care power of attorney is a set of instructions that grants the agent the authority to make health care decisions on the principal's behalf. For example, the principal can list primary caregiver preferences, treatment preferences, preferences for life-sustaining measures, living preferences, among other things. The healthcare agent is also referred to as the "patient advocate".
Without a properly drafted health care power of attorney, an incapacitated individual would need their family to file for guardianship to have someone handle the individual's care, custody, and medical and mental health care treatment decisions. It's best to have someone you trust acting in such a capacity. As such, having a health care power of attorney is essential to ensure your decisions are followed.
Conclusion
Planning for your lifetime with powers of attorney can save you headaches, time, and money. Rather than having a stranger make decisions for you, take the time to craft a plan today that will give you control over who makes those decisions. If you want to learn more, contact Jabbour Law today by filling out the contact form on our website or give us a call at (313) 504-4704!