Although we all like to make our own decisions, there may come a time when we no longer have that luxury. If that happens, a power of attorney is an important document to have, says Shawn Pierson, owner of the Law Office of Shawn Pierson, Lititz.
“There is a great probability that the majority of us will be unable to make financial or health care decisions at some point in our lives,” Pierson says. “As we live longer, this probability increases.”
Luckily, he says, there are plenty of tools available to plan for how to handle decision-making after an accident, during an illness or in the event of mental incapacity.
There are three types of power of attorney: financial (the most commonly used, Pierson says), limited (designed for a specific purpose) and health care (often accompanied by a living will).
A power of attorney is important, says David R. Morrison, attorney at law with Elder Law Associates in Lancaster, because if you don’t have one, a guardian must be appointed to make decisions, and the decisions may not be ones you’d have chosen for yourself.
And it doesn’t matter if you’re a young adult, single, married or elderly, Pierson says. A power of attorney is important for anyone over 18.
“It is never too early to put this document into place. However, it can be too late if we become incapacitated before signing our POA,” he says. “If we don’t have this document, this creates a difficult situation where no one has the legal ability to assist us in making decisions and may result in the need to pursue the costly and time-consuming guardianship process through a court.”
Designating someone as your power of attorney requires finding someone you trust and who is available in an instant if quick decisions need to be made, Morrison says.
“For a medical power of attorney, it helps (if the person) lives nearby and knows you well,” he says. “For a financial power of attorney, the person does not have to live nearby, but must be trustworthy and competent.”
The person you choose, known as your agent, should be chosen carefully, Pierson says.
“Always have back up agents,” he says, “so if your primary agent becomes unavailable, your backup agent can step in.”
He also advises reviewing a power of attorney document carefully before signing it and asking questions of the attorney preparing it.
“Your document should only give the powers you want your agent to have,” he says. “This is a powerful planning tool. Care should be taken that you are giving proper powers — you decide what is proper — to your trusted and chosen agent.”
Finally, he says, when it comes to a financial power of attorney, decide whether it’s immediately effective (most are, he says) or is only in effect upon a triggering event — and you get to decide the event.
“There is no requirement that an attorney prepare the POA,” Pierson says. “However, using a form document off the internet or from an office supply store will almost certainly leave you with a document that does not meet your goals and may even give power that leads to you being subject to financial exploitation or abuse.”
For this reason, he advises consulting an attorney who regularly prepares power of attorney documents.
He also advises updating your power of attorney regularly.
“While powers of attorney generally do not have ‘end dates,’ they can lose efficiency over time due to our own personal situation or changes in the law,” Pierson says. “You should update your POA as your circumstances change, such as the need to change your agents. Consider reviewing your document at least annually and contact the attorney who prepared the document if you have questions or need to make changes.”
Above all, he says, do not wait to set up a power of attorney.
“Remember, a POA will likely become your most important legal document as it allows you to exert control over an uncertain future,” he says. “Don’t wait to put this essential tool in place.”
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