Powers of Attorney: What Are They and Who Needs Them

When people think about estate planning and powers of attorney, they often have a few common misconceptions. First, estate planning is only for rich people. Second, they tend to think it is something they can put off until they get near retirement. While the size of your estate and your age are two key factors in your estate plan, every living breathing person needs to at the very minimum have powers of attorney in place. Below, I will discuss what powers of attorney are and who needs them.

What are powers of attorney?

Powers of attorney fall into two main types:

• Durable power of attorney (also called a general durable power of attorney or a financial power of attorney)  
• Health care power of attorney

Durable power of attorney

A durable power of attorney has many names but basically gives the person you name as your agent the ability to step into your shoes and conduct business on your behalf. It does not have to be the same person who is going to make your medical decisions. This document should be pretty extensive and is designed to cover any situation that could arise. 

I call it a kitchen sink document. If you are incapacitated and your agent needs to do something on your behalf, there should be a clause in there to cover it. This document can be modified to grant more powers or to restrict powers given to your agent. It can be very handy to married couples who might not own everything jointly or to a child who is stepping in to help their parent(s) manage their affairs later in life. 

In my own situation, my wife and I have a couple of things that are not in both of our names. Because we have a durable power of attorney, though, it’s not an issue if one of us needs to take care of something that is in the other’s name.

Health care power of attorney

A health care power of attorney should look the same no matter where you get it. A good estate planning attorney can walk you through it, but this is not a document that generally gets a lot of customized language. There are questions to be answered and it can be modified, but these should be pretty uniformed. 

When I turned eighteen years old and was getting ready to leave for college, my parents had powers of attorney drawn up for me so that in the event something happened to me they had the legal authority to step in and make decisions for me. The health care power of attorney, like the name implies, gives the person you name the legal authority to make health care and medical decisions on your behalf if you are unable to do so. If you are alert and aware of what is going on, then you have the absolute authority to make decisions about your health care. 

However, if you are unable to make your own decisions due to a traumatic event or incapacity of some kind, your health care power of attorney designee can do so for you. The person you name should be someone you trust and someone who is the kind of person that keeps their head on straight in crisis situations. Most families have someone who would be better at that type of thing than others. Having a health care power of attorney in place can save a lot of arguments and fighting amongst family members and gives medical professionals one point of contact, as opposed to needing multiple people to agree on a particular plan of action. 

Settle powers of attorney questions with your estate planning attorney

There’s a lot to think about when setting up each of these documents and a good estate planning attorney should be able to walk you through each one and explain them in detail. If you don’t already have powers of attorney for yourself or your loved ones, call me today to schedule a free consultation. I’m available for in person or virtual meetings. 843-350-1792