30 Nov What Happens If There Is No Power of Attorney?
By: Barry E. Haimo, Esq.
February 18, 2016
What Happens If There Is No Power of Attorney?
When we plan for the future, we tend to plan for a few particular events, instead of planning for the unexpected. Do I have enough money if I lose my job or want to retire? Do I have good health insurance if I get sick? Do I have a plan to pay off my debts?
These are all important things to plan for, but what happens if you are suddenly incapacitated or unable to make decisions for yourself? Regardless of whether you think this situation is likely, it’s crucial to think about and plan for because unexpected things happen all the time.
A Power of Attorney is a legal document that allows you to name a trusted person to make the necessary financial and business decisions in case you are ever incapacitated or unable to make those decisions on your own. Creating a Power of Attorney can offer you security and relief that the essential details of your life will be taken care.
With a Power of Attorney, you can designate a person of your choosing and give that person as much or as little power as you’d like. Some people want a Power of Attorney to handle all of their affairs if they are incapable of handling them themselves. Some people want a Power of Attorney for finances or legal purposes only. Still some people want a Power of Attorney to take effect only after they become incapacitated – not before. In this respect, some jurisdictions do not allow this deferred power, which requires creative lawyering to achieve this type of goal.
Since a Power of Attorney is capable of making many decisions, you’re probably wondering what will happen if you don’t have one in place and become incapacitated or unable to make your own decisions.
Problems That Can Arise When You Have No Power of Attorney in Place
In the event that you don’t have a Power of Attorney in place, the courts will have to step in and appoint a legal guardian to take care of your affairs. This can be especially problematic for you for a number of reasons. Let’s look at a few of those reasons.
- You don’t get to choose your guardian. When you create a Power of Attorney, you get to appoint an agent (or an “attorney-in-fact”) of your choice.. Maybe you don’t want your agent to be your spouse or a family member because it might be too difficult for them. Or maybe you’re afraid they might not be responsible enough to make tough decisions. The court will usually appoint a close family member, but without a Power of Attorney, you will have little say in who the court ultimately designates as your agent, and that will have to come in the form of petitions, motions and court hearings
- Appointing a guardian takes time. Once you are incapacitated, someone will have to file a Petition to Determine Incapacity. The court will then appoint medical experts to a committee to evaluate you and determine whether you are incapacitated.
When the committee concludes that you are incapacitated, the court will appoint a family member to be your guardian. That family member will have to attend an 8-hour course on the responsibilities of guardianship along with submitting to background checks. This process can be especially time-consuming, and you might need immediate decisions made.
- Appointing a guardian can be expensive. Not only do you have to pay court fees, but you will also have to pay committee fees, attorney fees, and yearly guardianship fees. The cost can get especially high depending on the particular circumstances of your situation, not to mention that it requires judicial oversight at almost every step
You can easily avoid the stress of putting your loved ones through the guardianship procedure by planning ahead and creating a Power of Attorney before you need to have one. Trusts can also be particularly useful in this regard, but that’s a discussion for a different post on a different day.
Since a Power of Attorney is such a powerful and essential estate planning document, you should contact an experienced Florida estate planning attorney to ensure that your Power of Attorney will meet your specific needs.
Barry E. Haimo, Esq.
Strategic Planning With Purpose
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Originally posted 2016-02-18 13:30:20.