So much time is spent considering what will happen on death, whether for estate tax reasons, the appointment of a guardian for children, or how special items will be distributed to family members, people often forget about a lifetime plan. It is important to consider who you trust to make decisions if you cannot. In this situation, financial and health care powers of attorney are critical. Both of these documents allow the person designated to step into the shoes of the principal and make either financial or health care decisions until the principal’s death. It is best to provide not only an agent, but also at least one alternate.
Durable Power of Attorney. A durable power of attorney allows the person designated to transact business affairs. This includes, but is not limited to, paying bills, filing taxes, and handling investments. The attorney-in-fact is authorized to deal with the assets of the principal without the necessity and cost of a formal court appointed guardianship. The attorney-in-fact serves without the publicity involved in a court appointed guardianship. A power of attorney may be as broad or limited as necessary, and may be for a specified period of time, or continue on until the principal’s death.
Health Care Directives. Just as important are Health Care Directives. A Health Care Power of Attorney allows the person designated to make health care decisions when the principal is unable to do so. Not only does this provide specific guidance as to who will make decisions, but it helps avoid arguments among family members. Again, the lack of a Health Care Directive can mean a court appointed guardianship which comes at a significant cost and loss of privacy. Agents easily step into the shoes of the incapacitated making decisions as necessary, and once a principal recovers, the agent’s duty ceases until the principal again needs help, if ever. Additionally, these documents are completely flexible, they can be revoked or amended at any time, assuming competency.
A Living Will is an individual’s statement as to whether or not they would like to receive life sustaining treatment. Each state has different rules, but generally, the principal discloses their intent on a living will and designates which person or people should be notified if life sustaining treatment is to be removed.
Custodial Power of Attorney for Minors. This document serves many purposes, but the end result is the same. A custodial power of attorney for minors allows a parent to appoint someone else to briefly care for their child. Often, parents draft this document when they leave town on vacation, especially a plane ride or more away. It can be drafted for a daily caregiver, if there is an emergency and the caregiver needs to get a minor child to the hospital. Again, this document may be broad or limited, it can appoint one, or several agents. The focus however remains the same, to allow the agent to step into the shoes of the principal parent, to care for a child, when a parent cannot.
These simple documents provide a smooth transition during incapacity or even when an individual is out of town, and are very simple to prepare.