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Loudonville, Ohio |
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NOTICE: THIS DOCUMENT IS INTENDED TO OFFER
GENERAL INFORMATION REGARDING LEGAL ISSUES. IT DOES NOT CONSTITUTE
LEGAL ADVICE. READERS ARE ENCOURAGED TO CONSULT AN ATTORNEY FOR
LEGAL ADVICE IN LIGHT OF THEIR OWN CIRCUMSTANCES. Should your estate plan include a Power of Attorney?
Many clients come to our office having heard of a Power of
Attorney (POA), but
without really knowing how it can be of benefit to them. The truth
is, in today’s world POA’s can be very valuable to almost
everyone.
There are generally two types of POA’s used in estate
planning. The first is the General Durable Power of Attorney. This
document allows you to name a person or persons to “stand in your
shoes” to carry on business, financial and property transactions.
This means that the person named could sell property, re-title an
automobile, carry out banking transactions and many other similar
functions. This can be important in two ways. First, it can offer
great convenience. If a person needs to go out of town to re-title a
car or to get the annual stickers and can’t go, the person they
named can do so for them. We frequently see
situations where a Power of Attorney is used not for convenience,
but rather out of extreme necessity.
If a person becomes incompetent or incapacitated at any point
during their life then the person named in the POA can continue to
manage their affairs. For example: if someone reached a point where
they could no longer take care of their property and needed to be
cared for in a long-term care facility, the person named in their
POA could sell their home or other property for them and manage
their property and financial affairs.
This would include things such as conducting banking, buying
or cashing in CD’s, stocks, mutual funds, etc.
The second type of
Power of Attorney is the Durable Power of Attorney for Health Care.
This POA states that if you are unable to communicate with your
physician for any reason, then the person you have named will be
empowered to make your health care decisions for you. This can apply
if you are unconscious, heavily medicated, incapacitated or other
situations. Together these two
documents allow an individual to ensure that if any situation arises
where he or she loses capacity to manage their estate or provide for
their own health care then someone they have selected can step into
those roles and take care of them. This power can be invaluable in
the case of an accident or simply some of the changes that come with
age. People often ask what
happens to a person who needs these documents, but does not have
them and is no longer of the capacity to have them created. In such
a situation the only option is for someone to apply for a
guardianship over the person. This can be a difficult and expensive
proposition. It is important to remember that to create a valid POA,
the person granting the power (called the “Principle”) must be
competent and able to understand fully the power he or she is
granting. Too often, we
see family members come into our offices because Mom or Dad is
incapacitated and someone needs to be making financial or health
decisions for the parent. At
that point of incapacity, IT IS TOO LATE! The same reason that a POA is needed is the same reason that
Mom or Dad is no longer competent to sign a POA.
POA’s must be done BEFORE the extreme necessity arises. Powers of Attorney are
a very important part of any solid estate plan. They allow your
trusted loved ones to take steps that normally only you can, but at
a time when you are unable. They allow loved ones to know that in
the face of accidents, age and health concerns they will be able to
provide the care you need.
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© 2003, Kick & Gilman, LLC |
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