How Well Do You Know Your Power of Attorney?
- Posted in: Estate Planning
Imagine for a moment that you (or you and your spouse) are in a car accident, knocked on the head, and suffer brain injuries great enough to put you into a coma for 2 weeks and require a full seven months of nursing and rehabilitative care. Thankfully, you make a full recovery of all your cognitive powers; but in the meantime, who has been taking care of all of your responsibilities? Have you lost your home because nobody was paying the bills? Did you end up in a sub-standard recovery facility because nobody could sign the nursing home contract on your behalf? Do you have a living trust that addresses this situation but was never brought into play because it languished in a safe deposit box to which nobody had access but you?
An essential part of any trust or estate plan is the execution of a Power of Attorney. This is the document that gives your nominated agent the power to do all of the things you would normally do: sign legal documents, write checks, access safe deposit boxes, and more. A Power of Attorney—if it’s done right—is an extremely comprehensive document (as described in this great article in the New York Times), and as such can make many clients nervous about signing it. Does this mean you should go without? Absolutely not!
“…Even if signing a power of attorney makes the client feel vulnerable, it’s far better than living without one. If you become incompetent, you lack the capacity to make legally binding commitments. Without a power of attorney, your family might have no choice but to ask a court to appoint a guardian to oversee your finances. This can be an expensive and sometimes embarrassing ordeal and can involve unpleasant, even acrimonious, exchanges.”
Trusting another person with such power may be difficult, but the alternative can be far worse. Executing a power of attorney doesn’t have to be a nerve-wracking ordeal; talk to your lawyer about your concerns, work with him or her to choose an agent with whom you feel comfortable, and discuss the circumstances in which a power of attorney might be necessary. The last thing you want is for your home and finances to deteriorate because you were out of commission for a couple of months, and this is exactly what a power of attorney is designed to prevent.