You may have heard the phrase “power of attorney” before and may associate it with someone giving another person permission to make legal decisions for them. While that is part of it, a power of attorney is the most critical estate document you will ever sign.
People grow older and time flies. In the blink of an eye, a 45-year-old executive finds himself reading the New York Times while sitting in his armchair at age 85. He still feels like that 45-year-old, but his body tells him something else.
Modern medicine has done miraculous work in ensuring we stay alive longer, but that often comes at a cost. It is common to get diseases as people get older, like:
- Alzheimer’s disease
- Parkinson’s disease
In many cases, these diseases affect a person’s ability to make sound decisions for themselves. According to the American College of Trust and Estate Counsel, two-thirds of people are likely to become incapacitated before death.
Let’s say you become incapacitated before dying and do not have a power of attorney.
- Your family is going to have to go to court.
- They will have to request that a judge appoint a legal guardian or conservator for you, usually at a cost because of the attorney fees and court fees.
- The judge will appoint a stranger to make financial and healthcare decisions for you.
That does not sound like an ideal situation. Another option is to think ahead and have a power of attorney in place. It may not be a pleasant process if you have multiple children and have to choose one to administer your assets and make decisions about your health. It can be uncomfortable.
You can choose more than one person, and it does not have to be one of your children. However, that can be complicated if you have more than one child. In that case, every one of them would have the authority to sign your checks and make medical decisions for you.
You can also pick a trusted advisor, a friend you have had for years and trust with your life, or if your children understand what you want and you trust that they will follow your desires, you can pick them.
The critical point here is to have a power of attorney in place and to do this while you still can do it. The sooner, the better. Believe it or not, capacity has been argued in court as the basis for invalidating a power of attorney. Make sure you have your ducks in a row and do it well ahead of time.