What is a Power of Attorney and Why Would You Need One?
A Power of Attorney (POA) is a written authorization to represent or act on another's behalf in financial, business, medical, or other legal matters. With a POA, the “Principal” gives power to an “Agent” to act on their behalf. There are different types of POAs that grant different types of decision-making authority. A Financial POA gives the Agent authority over financial decisions. A Medical POA allows an Agent to make medical decisions for you in case you become incapacitated and can’t make those decisions on your own. Basically, these are protection document that gives an Agent legal authority to help you. It is extremely important to have a POA in place before you would need it, because a POA is easy to set up before the fact, but a lot more difficult when the need is immediate.
A POA will hopefully protect you from having the court step in and grant another person or state agency the authority to make decisions on your behalf. This can be problematic as this Agent may not know your intent and may make decisions against your wishes. A POA you create, however, may limit what your Agent can and cannot do. This may help to directly reflect your wishes and protect any assets described in the document.
If you’re wondering how a POA differs from a guardianship, there are two important differences. First, a POA can be signed and grants authority to the Agent to act without requiring court approval. This drastically reduces the time it takes before the Agent can act for you. A guardianship may require a hearing with the presentation of testimony or affidavits from a licensed physician. The second important difference is that a guardianship is not typically necessary until you become incapacitated, while a POA is typically created and signed while you are still able to communicate your wishes.
Having the POA in place before an emergency makes sure that you sign the document as a competent Principal. This ensures that you understand what you are signing to help prevent later challenges to the POA’s validity. However, if you became incapacitated before a POA was signed, obtaining a guardianship with a court order may be necessary. A POA could also be useful in situations where you would not be able to manage your own finances even if you are not incapacitated.
An experienced attorney can help craft a Financial or Medical Power of Attorney to provide assurance that your wishes will be carried out. If you need more information about POAs and how these important legal documents can benefit you and your loved ones, contact us today! At Carlson & Burnett, we subscribe to the belief that “What’s in the family, should stay in the family!” Contact one of our attorneys to schedule a consultation at (402) 810-8611today!