POAs and other advanced directives are becoming more important
Provided by James A. Carolan, CWS®, CTFA Sr. Estate Planning Attorney for EWM Legal Services
The point of the POA.
A power of attorney (POA) is a legal instrument that delegates an individual’s legal authority to another person. If an individual is incapacitated, a Durable POA assigns a trusted party to make decisions and act on his or her behalf
There are nondurable, springing, and durable powers of attorney. A nondurable power of attorney often comes into play in real estate transactions, or when someone elects to delegate their financial affairs to an assignee during an extended absence. A springing power of attorney “springs” into effect when a specific event occurs (usually an illness or disability affecting an individual). A “durable” power of attorney allows an assignee, or agent, to act on behalf of a second party, or principal, even after the principal is not mentally competent or physically able to make decisions. Once a principal signs, or executes, a durable power of attorney, it may be used immediately, until it is either revoked by the principal or the principal dies.1
Keep in mind this article is for informational purposes only. It’s not a replacement for real-life advice. Make sure to consult your legal professional so you can better understand what type of powers of attorney is the best fit for your situation.
What the POA allows in financial terms. Financially, a Power of Attorney is a tremendously useful instrument. An agent can pay bills, write checks, make investment decisions, buy or sell real estate or other hard assets, sign contracts, file taxes, and even arrange the distribution of retirement benefits.
Advanced healthcare directives: HCPOAs and Living Wills. Some illnesses can eventually rob people of the ability to articulate their wishes, and this is a major reason why a Health Care Power of Attorney/Patient Advocate Designation or a Living Will are important. There are differences between the two.
A Health Care Power of Attorney/Patient Advocate Designation allows an agent to make medical decisions for a principal should they become physically or mentally incapacitated. The power should specify your wishes for how to care for you and provide guidance to the person appointed as your Patient Advocate. A living will provides direction to the medical providers should your Patient Advocate not be available, and provides additional guidance to your Patient Advocate when making decisions on your behalf.
James A. Carolan may be reached at 248.924.3129 or jcarolan@ewm-legal.com.
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Citations
- AgingCare.com, August 23, 2021
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