Fast Facts About Power of Attorney Documents
While everyone’s life and estate planning will look different, there are a few parts that will almost always be there. Arguably, the most important are the Power of Attorney documents. These documents can prove to be a massive lifesaver for families. However, they are far from foolproof. Making sure it is done right and knowing its limits are vital to ensure things go smoothly when days are rough.
Power of Attorney documents, simply put, allow people to speak and act for you if you are unable to do so. There are two different versions of these documents, a Medical Power of Attorney and a General Power of Attorney. A Medical Power of Attorney outlines who is able to make medical decisions for you when you can’t. This can activate in everything from a car accident to routine surgery. A General Power of Attorney is activated in the same way. However, rather than medical decisions the person named can make financial decisions. The person the documents are drafted for are called the Principal. The person they name to be in charge is called the Attorney In Fact.
Having these documents in place allows those you love and trust to speak and care for you. Doctors, hospitals, and banks all use Power of Attorney documents. They also provide a safe step between personal autonomy and a Guardianship, which is more expensive and far harder to remove.
One of the most common questions we hear is “Can I name different people in each document?" The answer to this is “Yes!” You can name whoever you would like in either document. This is a great idea for families where different people have different abilities, or play different roles in people's lives. However, this can also create confusion if these roles are not explained well to everyone.
While these documents are important, there are pitfalls. If people don’t know they are named, or do not know where documents are, it can cause confusion during hard times. If documents are not properly filed ahead of time, they may not be recognized. This is especially true for financial institutions, as there are no laws mandating that they must follow any given Power of Attorney document.
While those mistakes are bad enough, there is another that causes people far more trouble. The most important thing to remember about a Power of Attorney is that it stops working upon the passing of the principal. The scary truth is that continuing to use a POA after the passing of the principal can be considered fraud, and could land you in very hot water.
How do you avoid these dangerous situations? The first, and best way is to ensure that your estate planning is done well ahead of time. Working with an attorney and their team will ensure that everything is done as well as possible. In addition, they will be able to tell you about the uses and limitations of whatever documents you have. They may also be willing to have conversations with anyone named in documents to help explain what they will need to do in case of an emergency. If you have any questions, or would like to move forward with your own planning, please give us a call today at 419-352-7522!