Aside from creating a will, it is important that you create other estate planning documents like a trust, letter of intent, beneficiary designations, health care power of attorney, and a power of attorney. A power of attorney is an important estate planning document because it help ensure that your estate is well taken care of while incapacitated.
Before we consider the importance of creating a power of attorney, let us take a look at what a power of attorney is.
What is a power of attorney?
A power of attorney (POA) is a document in which you appoint another person to act and make decisions on your behalf. In such a setting, you are called the principal while the agent you appoint is called an attorney-in-fact (note that this person doesn’t have to be a legal professional in anyway). A power of attorney sometimes is also used to refer to the attorney-in-fact.
The power of attorney document authorizes the agent over a broad or limited jurisdiction as set out by the principal. They can either be authorized to make financial decisions, health care decisions, both, or even handle the personal and domestic care of the principal as the case may be.
Who should get a POA?
For people who are good travelers or are in the military and will be serving in other countries, a power of attorney document is an ideal option that could be considered. Other age groups should consider creating setting up this legal document are retirees or seniors.
Who should you designate as your agent?
When selecting an agent, or the individual who will be in charge of making those important decisions on your behalf, ensure that you choose wisely. This individual will have unlimited access to your finances, your home, and also, your health. When choosing an agent make sure you choose someone you can completely trust.
Two main reasons to create a power of attorney
1. Making financial decisions on behalf of the principal
You can designate a power of attorney so that someone can manage your financial affairs when you are unable to do so, due to absence or incapacity. The agent would be responsible for:
- Making investment decisions for the principal
- Making sales
- Cashing out profits
- Filing taxes
- Paying the principal’s bills
- Paying the principal debts using their funds
- Applying for Medicaid and veterans benefits as the case may be.
2. Making medical and personal decisions on behalf of the principal
If the principal becomes unable to make decisions concerning their own healthcare, possibly because they’re unconscious on the sick bed, a power of attorney enables them to have someone making the right call as they would have done. This kind of power of attorney is also sometimes referred to as healthcare proxy—that is, putting your healthcare into someone else’s hands.
In this case, the agent can make decisions concerning:
- What kind of medical care the principal receives
- Where they receive the care
- Which doctor and care provider attend to the principal
- Where the principal resides for their long-term care
- Feeding
- Bathing, washing, and other personal care.
When will a POA take effect?
The power of attorney doesn’t take effect until the principal cannot make crucial decisions on his or her own, or if the principal is incapacitated. This can either be physical incapacitation or mental incapacitation. If it is physical incapacitation, the principal may be in coma. If it is mental incapacitation, the principal, is plagued with some kind of mental illness that has taking away his or her ability to think straight.
Need an Estate Planning Attorney?
An estate plan is best created with the help of an estate planning attorney. Our estate planning attorneys aren’t only experienced, they are versed in the estate laws of New York. These professionals will ensure that your estate is planned according to the laws of New York and according to your wishes.
Do you need to update your estate plan? Or do you need to draft or create any of the estate planning documents listed above? Don’t hesitate to contact our attorneys. They are good at what they do and can provide you with the best estate planning services.
