By: Barry E. Haimo, Esq.
April 5, 2016
Who Needs a Power of Attorney?
With a Power of Attorney, you can give someone else the authority to make decisions and act on your behalf for a wide variety of reasons. For this reason, a Power of Attorney, or POA, is an essential document to any basic estate plan.
In the event that you are incapacitated or simply unable or unavailable to perform an act, a Power of Attorney empowers someone else – your agent – to do those things for you. A POA handles your financial and administrative affairs. If, however, you are looking for someone to handle your health care or medical decisions, you will instead need to establish a Health Care Surrogate. Basically, a Health Care Surrogate is like a health care Power of Attorney.
A Power of Attorney allows someone to access bank accounts, file taxes, pay bills, make investment and other financial decisions, buy and sell property, sign contracts, and perform many other actions that you are unable to do.
Along with those actions, you can also grant broad or limited powers depending on your needs or wants. You may want someone else to be able to handle all of your affairs if you are unable to do so. This would be a general Power of Attorney. Or, you may want to make use of a Limited Power of Attorney where your trusted agent only has to handle a very specific situation within a certain time frame.
Understanding what a Power of Attorney is is the first step in determining if you should have one. Although it is not required to execute a Power of Attorney, it is extremely beneficial to have one in place in the event that you need one. So, in short, everyone could benefit from a Power of Attorney, but you might not need a Power of Attorney.
In the event that you are incapacitated. While we never plan to be incapacitated, many things are out of our control. If something happens that renders you incapacitated, who will take care of your affairs? That’s why you should be prepared, plan ahead, and create a Power of Attorney while you are still competent and healthy.
Additionally, creating a POA will also help you to avoid guardianship proceedings. If you are incapacitated and you do not have a POA, the court will have to appoint someone to manage your affairs. Along with being expensive, unpredictable, and time-consuming, you cannot name your own guardian, whereas you can with a Power of Attorney.
If you are married. When you are married, your spouse does have authority over jointly owned assets, but that authority is limited when it comes to jointly owned real property such as your residence. If you want to sell property that you and your spouse jointly own, you both need to agree to the sale. An incapacitated person, however, is unable to give their consent to a sale, which means the property will have to remain as-is or your spouse will have to go to court and request a guardianship. But a Power of Attorney can give your spouse the authority to sell such jointly owned property without any hassle. If you do not own jointly owned property, then your spouse will need a POA to act on your behalf as well.
If you want someone to handle your financial or administrative affairs. If you travel frequently, you may want to consider naming an agent under a Power of Attorney so that someone else can handle your affairs any time you are unable to. On a more limited basis, you may need a Power of Attorney for a single day when you’re unavailable to sign a contract or you may need someone to take care of your bills just for a particular month.
If you want someone else to have the authority to act on your behalf at any point during your lifetime, then you will need to have a POA. They can be as broad or as limited as you desire. In either case, a POA represents an indispensable piece of the estate planning puzzle. Even if you don’t end up using it, a Power of Attorney can give you the peace of mind to know that you have one in the event that something happens.
Barry E. Haimo, Esq.
Strategic Planning With Purpose
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