With numerous acronyms in the probate world, it is easy to get confused as to what legal professionals are referencing. One of those troubling acronyms is POA, which stands for “power of attorney.” Power of Attorney is a legal document that gives another person, who is often called an “agent,” the authority to act on your behalf should you become incapacitated and unable to care for your own affairs. A medical power of attorney is sometimes also referred to as a Patient Advocate Designation. Similarly, a financial power of attorney is a specific type of POA that authorizes this agent to make monetary-related decisions or act on your behalf regarding your financial matters. You are able to grant as much or as little power to your financial agent as you would like. Some tasks that the agent is likely to perform include: paying your bills, filing your taxes, reviewing medical expenses, and/or managing your real estate assets.
Why would you want a medical or financial POA?
There are a lot of uncertainties in life, and the freedom of knowing that your finances will be always managed by the person of your choosing, especially in the event that you are unable to do so yourself, provides many individuals with peace of mind. Likewise, knowing who may make your end-of-life care decisions, and having the power to select who that is now, can prevent a lot of headaches for families in the event of an emergency. Further, having both all but ensures that probate court oversight via guardianship or conservatorship won’t be required in the event of an accident or sudden illness.
When would the document take effect?
A financial POA can be drafted to take effect either 1) when you sign it; or 2) when a doctor specifies that you are incapacitated. The former, which is when you choose to sign a POA rather than being diagnosed as incapacitated, is also known as a “durable POA.”A durable POA becomes effective the moment you sign the document and only ceases to be effective if you revoke it. On the other hand, a springing financial POA “springs” into action only when you need it, i.e. when you are incapacitated. As such, if a POA is not durable, then your recovery extinguishes your agent’s ability to make decisions on your behalf.
Who can act as my POA?
Anyone over the age of 18 can act as someone’s POA. They don’t even need to be related to you. You should select your medical POA based on who you think is strong enough to make a potentially difficult medical decision on your behalf and who you believe would make the decision you want made, regardless of emotion. Likewise, your financial POA should be someone who is organized, and shares the same financial beliefs that you do. You don’t want to select someone who has had a lot of financial woes and can’t manage their own finances very well. They may be the same person, or they may not. The key is that you trust them implicitly in the role of which you nominate them. If you have reservations, perhaps they are not right for the position.
If you think that a POA is right for you, your spouse, or any loved one, or if you have more questions about POAs, please contact us for a free consultation at (248) 399-3300 or In**@***********ro.com. We are here and happy to help you!