“The Twelve Days of Christmas” is a popular song during the holidays, and often misunderstood to be the 12 days leading up to Christmas. The 12 days of Christmas are actually the 12 days after Christmas, leading up to Epiphany – or the day that the manifestation of Christ’s glory was realized – according to Christian tradition. In the spirit of the 12 days of Christmas, here are 12 ways that a Power of Attorney can help and protect you.
1. Allows You to Plan Ahead: Before a Crisis Hits.
If you wait until a crisis hits, it may be too late to prepare a power of attorney. Oftentimes I get someone who calls and wants to set up a power of attorney to allow them to act on another person’s behalf, but the person is unable to make their own decisions, or is unconscious in a hospital, or has advanced memory loss, which prevents a power of attorney from being signed. Planning ahead can avoid these types of problems, and lessen the impact of a crisis.
2. A Power of Attorney can be Unlimited or Limited, Depending on What You Need.
Most general powers of attorney give an agent the authority to do most anything that the principal could do, if the principal were able to make their own decisions. If a power of attorney is set up to allow the agent to handle the principal’s affairs when the principal is unable to act, this is desirable. Sometimes, a principal does not want an agent to have control over certain decisions, an a power of attorney can be limited to the matters described by a power of attorney.
There is even such thing as a limited power of attorney, which allows an agent to act only in a certain, well-defined, set of circumstances, and such circumstances may be temporary. As an example of this, a person may designate an agent in a limited power of attorney to sign on their behalf at a real estate closing, but for nothing else. Limited powers of attorney are useful, but in an estate planning context, general powers of attorney tend to be more useful and helpful, especially for end of life planning situations.
3. Power of Attorney can be Written to be Effective Immediately, or in the Future.
Many times, a power of attorney is written to take effect immediately. This can make people uncomfortable, as they fear that the person designated as their agent will be able to access their funds and use the funds in an inappropriate way. This is also a fear of people who name successor agents in a chain, and fear the successor agent can act immediately. Neither is the case, but if someone fears losing control of their assets, a power of attorney can be written to take effect after someone has become incapacitated. In this case, a power of attorney can give an agent power to act on another’s behalf and determine the principal is incapacitated, and then the remaining powers can be put into effect
4. Gives a Trusted Person the Power to Make a Decision For You.
A power of attorney allows you to designate who will make decisions for you, if you cannot make your own decisions. A person who makes a power of attorney is called the principal. Giving power to someone you know and trust will protect you from someone you don’t know making decisions for you
5. An Agent Under a Power of Attorney Must Act in Your Best Interest.
An agent must act in the best interest of the person who gave them authority at all times. An agent is legally prohibited from acting in their own self interest, and must do what is right for you.
6. A Power of Attorney Can be for Financial or Medical Decisions.
Powers of attorney can be written to allow someone to make decisions for the principal, and this person who receives power to act is known as an agent. An agent can be designated to make medical decisions for you. An agent can also be designated to make financial decisions for you. These two types of decisions can be covered by separate documents, or in one document.
7. Different Agents Can be Designated for Financial or Medical Decisions.
You can designate different agents for different types of decisions. One agent may be better at medical decisions, while another better at financial decisions.
For example, I have a client with one child who is an accountant, and another child is a doctor. You can guess who is the financial power of attorney agent and who is the medical power of attorney agent without me telling you, and without my help.
8. A Power of Attorney can Allow Someone Else to Implement Your Desires.
What is in a person’s best interest can vary from person to person. By properly designating an individual you know and trust, your wishes and desires can be carried out by the person you have chosen. You want to make your own decisions, so you want to choose who can make decisions for you, as well.
9. Powers of Attorney are Not Just for the Elderly – Everyone Needs One.
Life is unpredictable. Unforeseen circumstances can render anyone incapable of making their own decisions in a very short time. So, in planning ahead, you want to put a financial and medical power of attorney in place before a crisis happens. That way, when the unexpected hits, you have a plan in place to deal with the unexpected.
10. Powers of Attorney are Useful for Children Helping Aging Parents.
In most cases, powers of attorney are established to give children, or grandchildren, the ability to make decisions on behalf of their parents, or grandparents. Memory loss tends to affect the elderly more frequently, so this is understandable, and children, or grandchildren, who care for aging parents need powers of attorney so they can properly give necessary care, but there are other situations where a power of attorney can be helpful.
11. Powers of Attorney are not Just for Adults, Parents, and Grandparents, but Can Help Parents of Adult Children.
Parents may send their children off to college, but is the child is over 18, then the child will be treated as an adult. If an adult child is injured, then the parents will run into health care privacy laws, including HIPAA laws, that could prevent the parents from being able to be involved in medical care for an adult child. If the adult child is unable to return to school, or has financial issues stemming from an incident, parents could run into trouble accessing financial accounts, or school records, of an adult child, so a power of attorney can solve these problems for the parents of an adult child.
12. Powers of Attorney Empowers Who You Know and Trust, as You Instruct.
The overarching purpose of a power of attorney is to give someone else power to make decisions for you, if you cannot do so yourself. Most of the points listed above help achieve this purpose. Most importantly, a power of attorney gives you peace of mind because you delegate authority to an agent you know and trust You know who will make decisions for you, you can instruct that person in what you want, and you can be assured they will carry out your wishes. Your agent will act in your best interest, and you can get what you want.
Now that we have celebrated the 12 Ways a Power of Attorney can protect you, in a somewhat related, but slightly different spirit to the 12 days of Christmas, and it happens to be the 12th day of Christmas today – on January 5, (OK, well – the feast of Epiphany is on January 6th, but close enough!) we wish you the best during this coming year.
Click here to make an appointment to discuss setting up your powers of attorney.