|The benefits of a highly detailed, comprehensive power of attorney are numerous. Unfortunately, many powers of attorney are more general in nature and can actually cause more problems than they solve, especially for seniors. Below are some of the top reasons that everyone needs a comprehensive, detailed power of attorney.
1. Provides the ability to choose who will make decisions for you (rather than a court).
If someone has signed a power of attorney and later becomes incapacitated and unable to make decisions, the person named in the power of attorney who can make decisions (referred to as the “agent”) can step into the shoes of the incapacitated person and make important financial decisions.
2. Avoids the necessity of a guardianship or conservatorship.
Without a power of attorney, a guardianship or conservatorship may need to be established. This is a lengthy and complicated process that can be very expensive. Someone who does not have a comprehensive power of attorney at the time they become incapacitated would have no alternative other than to have someone else petition the court to appoint a guardian or conservator. The court will choose who is appointed to manage the financial and/or health affairs of the incapacitated person, and the court will continue to monitor the situation as long as the incapacitated person is alive. In addition to being a costly process, another disadvantage of a guardianship and conservatorship is the fact that the incapacitated person has no input on who will be appointed to serve.
3. Provides family members a good opportunity to discuss wishes and desires.
There is much thought and consideration that goes into the creation of a comprehensive power of attorney. One of the most important decisions is who will serve as the agent. When a parent or loved one makes the decision to sign a power of attorney, it is a good opportunity for the parent to discuss wishes and expectations with the family and, in particular, the person named as agent in the power of attorney.
4. The more comprehensive the power of attorney, the better.
As people age, their needs change. Their power of attorney should reflect that. Seniors have concerns about long-term care, applying for government benefits to pay for care, and choosing the proper care providers. Without allowing the agent to perform these tasks and more, precious time and money may be wasted.
5. Prevents questions about principal’s intent.
No one wants to have to go through a court battle to determine what a loved one’s wishes would have been had they signed a power of attorney. A well-drafted power of attorney, along with other health care directives, can eliminate the need for family members to argue or disagree over a loved one’s wishes. Once written down, this document is excellent evidence of their intent and is difficult to dispute.
6. Prevents delays in asset protection planning.
A comprehensive power of attorney should include all of the powers required to do effective asset protection planning. If the power of attorney does not include a specific power, it can greatly dampen the agent’s ability to complete the planning and could result in thousands of dollars lost. While some powers of attorney seem long, it is necessary to include all of the powers necessary to carry out proper planning.
7. Protects the agent from claims of financial abuse.
Comprehensive powers of attorney often allow the agent to make substantial gifts to self or others in order to carry out asset protection planning objectives. Without the power of attorney authorizing this, the agent (often a family member) could be at risk for financial abuse allegations.
8. Allows agents to talk to other agencies.
An agent under a power of attorney is often in the position of trying to reconcile bank charges, make arrangements for health care, engage professionals for services to be provided to the principal, and much more. Without a comprehensive power of attorney giving authority to the agent, many companies will refuse to disclose any information or provide services to the incapacitated person. This can result in a great deal of frustration on the part of the family, as well as lost time and money.
9. Provides immediate access to critical assets.
A well-crafted power of attorney includes provisions that allow the agent to access critical assets, such as the principal’s digital assets or safety deposit box, to continue to pay bills, and to access funds in a timely manner. Absent these provisions, court approval will be required before anyone can access these assets. Digital assets are also important because of the growing prevalence of these types of accounts.
10. Provides peace of mind for everyone involved.
Taking the time to sign a power of attorney lessens the burden on family members who would otherwise have to go to court to get authority for performing basic tasks, like writing a check or arranging for home health services. Knowing this has been taken care of in advance is of great comfort to families and loved ones. If you are interested in learning more about powers of attorney or other estate planning documents, please call Alperin Law at (757) 490-3500 to schedule a consultation with an experienced elder law and estate planning attorney.