Importance of a Power of Attorney

Just because you have a will or trust does not mean your estate plan is complete. There are other documents (such as a living will, medical power of attorney, and financial power of attorney) that should also be included.

Of these additional documents, the power of attorney (PoA) may be the most important. A PoA, which authorizes someone to make decisions for you and "act on your behalf," may be separated into a medical PoA and a financial PoA, or in some cases, a single document may appoint someone to make both financial and medical decisions for you.

Consider the story of Joe and Jane, an unmarried couple. Joe recently suffered a medical emergency, and although he had been with Jane for a number of years, he had never appointed her as his agent (or attorney in fact), i.e., he never signed a PoA authorizing Jane to act on his behalf. Fortunately, Joe was well enough to appoint Jane as his agent. However, if he had not been, a difficult guardianship case may have resulted, and Joe may have become a ward of the court, certainly not what Joe nor Jane would have wanted. (Although this example is of an unmarried couple, it could easily be translated to a single parent who has not appointed a child or other trusted person as his agent.)

Power of Attorneys can be drafted in many ways: as a limited PoA (to address a particular event or a specific account); as a general PoA (which allows broader authority); as a springing PoA (which authorizes the agent power in the future, typically at the time of incapacity of the principal); or to take effect immediately.

To make sure your power of attorney is a blessing rather than a curse, enlist the services of a professional to ensure it is drafted with safeguards to protect you and to meet your particular needs.