Why Seniors Need A Power of Attorney

A power of attorney may not be the first thing that comes to mind when thinking about planning for the future as you get older, but it should be. Whether you plan to spend your senior years traveling and need someone to handle your finances while you're gone or have concerns about being unable to handle personal and business affairs on your own with assistance, you need a power of attorney.

Powers of attorney let you authorize someone that you trust to handle your finances and make important decisions about the medical care that you receive. The authority you give the person can be as extensive or as limited as you decide after consulting with your estate planning attorney who will create the type of power of attorney that you need.

Whether doing it for yourself or helping your senior parents to get their affairs in order, the first step should be learning a few essential facts about powers of attorney. The following overview of the different types and functions of powers of attorney along with the legal rights and obligations associated with each of them will get you started.

What is a power of attorney?

A power of attorney is a legal document that allows you as the "principal" to appoint someone you trust to act on your behalf. The person empowered to act for you is your "attorney-in-fact" or, more commonly, your "agent."

When presented to another party, the power of attorney lets them know that your agent has authority to make decisions and enter into binding legal agreements on your behalf subject to the terms and limitations that may be included in the power of attorney. For example, a power of attorney for healthcare cannot be used by an agent to negotiate the sale of real estate owned by the principal. Its terms limit the power to matters pertaining to the healthcare of the principal.

Each state has its own laws pertaining to the types of powers of attorney it recognizes and the rules for drafting and execution that must be followed for them to be legally valid. If your agent will be using a power of attorney in a state other than the one in which it was created, check with your attorney to ensure it will be recognized as valid in another state.

There are two important legal principles that exist in all states regarding the validity of a power of attorney. First, the principal must be mentally competent to sign legal documents at the time the power of attorney is created. The second is that the authority granted to an agent exists only during the lifetime of the principal. A power of attorney does not survive the death of its principal.

Types of powers of attorney

The most common types of powers of attorney include:

• General or conventional
• Durable
• Springing
• Medical or healthcare

A general power of attorney essentially grants an agent authority to act for you in any type of matter that you could handle for yourself, from paying monthly bills from your checking account to selling or buying real estate. You may add language limiting the scope of your agent's authority. For example, you may limit or exclude the agent from borrowing money on your behalf.

The authority granted to an agent under a general power exists until you revoke it or become incapacitated. If you want the reassurance of knowing that someone you trust can handle your affairs in the event of an incapacitating illness, such as Alzheimer's disease, you should consider a durable power of attorney.

Durable and general powers of attorney essentially possess the same features except that a durable power of attorney contains language continuing the authority of an agent to act even after the incapacitation of the principal. Seniors may wish to make use of a durable power of attorney for the reassurance it gives, knowing that someone has the authority to continue to handle your affairs when you cannot do so.

You may not be ready to give another person, even someone you trust, access to your financial accounts or the power to make decisions. A springing power of attorney may be the answer because it looks and acts like a durable power of attorney, but it contains language that makes it effective only upon the happening of an event that you specify in the document.

For example, you may only want to give your agent authority to act under a durable power of attorney in the event of your physical or mental incapacitation. Your lawyer simply adds language into the document directed that the authority granted does not become effective, or "spring" into action, unless you become incapacitated. The authority ends when the event specified in the document no longer exists.

The powers of attorney that have been mentioned so far do not allow the agent to make healthcare decisions for a principal. For that, you need a medical or healthcare power of attorney.

Medical powers of attorney authorize an agent to make decisions in consultation with your healthcare providers that are consistent with your wishes, including:

• Decisions about medical and surgical treatment
• Choice of medical facilities and physicians
• Decisions to provide or decline artificial hydration and nutrition
• Access to your medical records

You retain the right to make your own decisions and to consult doctors about healthcare unless you are incapable of doing so.

Do you need a power of attorney?

It's understandable for seniors to be hesitant about giving decision-making authority to another person. Some reasons for having a power of attorney include:

• Freedom to travel: Retirement offers the chance to travel, and a power of attorney gives you the reassurance of having a trusted agent looking after things back home until you return.

• Staying on top of finances: Unopened mail and unpaid bills may be a sign that you or a parent need someone to help ensure that financial responsibilities are met.

• Medical emergencies: Medical powers of attorney give you peace of mind knowing that your wishes will be followed in the event that you cannot make decisions on your own.

• Eliminate family conflicts: Squabbling among members to make decisions about your finances and medical care can be avoided by creating a power of attorney to put someone you trust in charge.

Life can be unpredictable, but a power of attorney offers seniors the same comfort and security you get from buying travel medical insurance before taking a trip. You may not need it, but it gives you peace of mind. The same is true of a power of attorney, which gives you the ability to know there is a trusted person with the authority to take charge and handle things if and when needed. That's a good reason to make a power of attorney part of an estate plan.

Author’s Bio:

Steve Howards has been writing legal-centric articles for several years now. He started working with the personal injury attorney law firm Herrig & Vogt in 2019 as the Content Marketing Manager, which has allowed him to expand on his writing in personal injury, family law, and much more. Steve strives to offer the public advice on various laws covering a variety of practices.