Powers of Attorney are just as important in estate planning as Wills, because before someone becomes deceased, they may become disabled. That’s when Powers of Attorney are valuable. In a POA, you get to choose, select, appoint and authorize who will help you if you need help assistance during your lifetime because you’ve become unable to take care of business yourself. (You also need planning for after you are gone, such as a Will and / or Trust.)
If you become incapacitated and have not signed a POA, then whoever steps up to help you will have to go to court and bring proceedings before a judge, to be officially appointed as something different called your Legal Guardian. As you can imagine, that takes longer, it costs more, and it’s a lot less flexible than proceeding under private Power of Attorney. Create Powers of Attorney now, in advance, while you can, before anything bad happens in the future.
Who should you choose and appoint?
Someone you trust to take care of important business for you. Most people start by naming their own spouse, or adult child, or others. Anyone acting under your POA is called your Agent. They do things for you, and they have a fiduciary duty – an obligation in the highest degree – to act properly on your behalf.
You should also name your choice as the backup or substitute or second choice, in case the first choice is not available to help you when needed. You may also appoint two or more people as Co-Agents, who may act together or each act individually and independently.
It’s all about making your own choices in life and writing it down and signing it, to give it binding force If you don’t make your own choices, someone else who you did not choose will make decisions for you.
I usually prepare two separate Powers of Attorney for my clients, a Business and Financial Power of Attorney, regarding finances, money business and property, and a Health Care POA combined with a Living Will.
One kind of health care decision that someday might need to be made for me at the end of the story is end of life treatment decisions. That’s covered in the Living Will part of the Health Care Power of Attorney, where it says, in effect, when it’s really my time to go, please let me go, don’t keep me alive on the machines and wires and tubes and needles. It comes into effect only when someone is about to die.
You get to decide when the Power of Attorney will come into effect.
For a financial POA, most of the time my clients choose to make it an immediately effective POA, that can be used when your Agent thinks you need their help. In this type, no doctor has to sign anything first.
Or you can make it a Springing POA that requires a doctor to sign off first. That kind is safer. but not as easy to use in an emergency. Your main protection is always that you will choose the person you trust the most in the whole wide world, to help you and do right by you.
In recent years, Pennsylvania tightened the rules about how a financial POA must be signed, witnessed and notarized in precisely the right way to be valid and effective. That’s one good reason why trying to do it yourself might not be such a good idea in this instance.
Although you have to do it just right to execute a valid Financial POA, it’s not hard to revoke it. Your revocation can be simple but must be in writing, and delivered.
There are many cases of financial abuse by someone acting under a POA. Trying to recover improperly taken money or property can be involved, with unpredictable results. Your best protection is choosing someone who will turn out to uphold and not betray your trust, at the start.
Even young adults may be at risk of disability from injury or illness and should make POA s, to authorize parents, for example, to act on their behalf, in such an unfortunate event.
One final important point to repeat: Don’t forget about planning for after your own inevitable passing, through a Will and or Trust, as well.