Power of Attorney
The Most Important Document You Might Ever Sign: The Power of Attorney
Statistics show that the vast majority of us will need a Power of Attorney at some point in our lives. This simple document can be the difference between a smooth, private management of your affairs during a crisis and a costly, public court proceeding.
A General Durable Power of Attorney (GDPOA) is a legal document that allows you to appoint another person—your “agent”—to have the legal authority to sign your name and manage your financial and transactional affairs.
What Happens Without a Power of Attorney?
This is a critical point of confusion for many families. While your next-of-kin may have some authority to make healthcare decisions for you if you are incapacitated, the same is not true for your finances. Without a GDPOA, your loved ones have no legal authority to access your bank accounts, pay your bills, or manage your property.
Their only option is to petition the court to have a guardian appointed. This process of establishing a legal guardianship can take months, involves significant court costs, and requires a judge’s permission for nearly every financial decision. During this time, your assets are effectively frozen, which can create a devastating financial crisis for your family.
The Role of Your Agent: A Fiduciary Duty
The person you appoint as your agent is serving in a fiduciary role—the highest standard of trust under the law. They have a legal duty to act in your best interest and make decisions as you would have made them. This is why it is essential to choose someone who is not only trustworthy but also responsible and capable of managing financial matters.
Why a “Simple” Power of Attorney is Often Not Enough
Laws regarding Powers of Attorney change, and not all documents are created equal. A short, generic form (typically 2-3 pages) is often insufficient for the real-world challenges families face, especially when it comes to long-term care. This is particularly true for families navigating the complexities of Alzheimer’s and dementia planning, where a robust Power of Attorney is a critical first step.
A simple POA may not grant the specific, advanced powers needed for effective asset protection. For example, it may not allow your agent to transfer your home to avoid estate recovery if you need to apply for Medicaid, or to take the necessary steps to help a loved one qualify for other programs like Special Assistance. An experienced attorney can draft a comprehensive document that provides the broad authority your agent will need to protect you and your assets.
A Foundational Document for Every Adult
A Power of Attorney is a foundational part of every adult’s estate plan. It is not just for seniors; it is for anyone who wants to ensure their affairs can be managed seamlessly if they are ever unable to do so themselves.
If you do not have a Power of Attorney, or if you have an older document that has not been reviewed in several years, our attorneys can help. Call our office at (919) 256-7000 to schedule a consultation.