Durable powers of attorney are important life care planning documents. These documents allow you to appoint someone to act for you (your "agent" or "attorney-in-fact"), as to your financial matters (Power of Attorney for Property) and your health care decisions (Power of Attorney for Healthcare), if you become incapacitated. Without powers of attorney, your loved ones would not be able to make decisions for you or manage your finances without asking the court to appoint a guardian or conservator, which is an expensive and time-consuming process.
There are many do-it-yourself power of attorney forms available; however, it is a good idea to have an attorney draft these forms for you. There are many issues to consider and one size does not fit all.
The agent's powers
The power of attorney for property document sets out the agent's powers. Powers given to an agent typically include buying or selling property, managing a business, paying debts, investing money, engaging in legal proceedings, borrowing money, cashing checks, and collecting debts. The power of attorney for healthcare document includes the power to consent to medical treatment and other decisions related to your person and healthcare. Particularly, with regard to powers of attorney for property, there are some powers that will not be included unless they are specifically mentioned. This includes such powers as the power to make gifts and the power to designate beneficiaries of your insurance policies.
Additional powers, not part of the statutory powers, may prove to be of particular importance, if you want to if you want to ensure your agent has the authority to do Medicaid planning on your behalf in the event you need to enter a nursing home. Simply put, since the wording in a power of attorney can be significant, consulting an attorney is strongly recommended.
Springing or immediate
The power of attorney can take effect immediately or it can become effective only once you are disabled, called a "springing" power of attorney. While a springing power seems like a good idea, it can cause delays and extra expense because incapacity will need to be determined. If the power of attorney is springing, it is very important that the method for determining incapacity is clearly spelled out in the document.
Appointing a guardian
Another use of a power of attorney can be to nominate a guardian in case guardianship proceedings become necessary. Including your preference for a guardian can allow you to have some say over who will be managing your affairs. Usually, the court decides who will be chosen as a guardian, but in most circumstances, the court will abide by your nomination in the durable power of attorney.
Executing the power of attorney
To be valid a power of attorney must be executed properly. Some states may require a signature, others may require the power of attorney to be notarized, and still others may require witnesses. It is important to consult with an estate planning attorney in your state to ensure your power of attorney is executed properly.