Imagine you’re incapacitated by an illness or accident. The doctor in charge of your treatment declares that a risky surgery might prolong your life. Should she proceed with the surgery? And if there are life-threatening complications, should the doctors keep you on life support? Imagine that, meanwhile, the IRS requests some information about your most recent tax returns, or you’re required to sign some documents related to a property you own. Now your loved ones are not only worried about your health, but are also confused regarding your wishes and the logistics of your personal affairs. Creating a power of attorney, or POA, allows you to give someone you trust the power to make decisions on your behalf when you’re unable to do so.
What Is a Power of Attorney?
Technically, a power of attorney is a document that names a person to act as your “attorney-in-fact” or “agent.” Despite the title, your attorney-in-fact doesn’t have to be a lawyer. Most people select a family member. If you become incapacitated before creating a POA, the courts may need to assign you a guardian, and it may not be the person you would choose for yourself.
There are several types of this document. A durable POA is the type many people choose. This document goes into effect as soon as you sign it, and it remains in effect until you either cancel it or die. A conventional POA only gives your attorney-in-fact the right to act in your name until you become incapacitated. Conversely, a springing POA only takes effect once you become incapacitated, or until some other named event happens; you can specify what future event or time will mark the beginning of the POA’s effect. A limited POA only gives your attorney-in-fact control over certain affairs, but not others. For instance, you may create a POA that relates to your health care and a second that relates to your finances and name different people in each.
Choosing an Attorney-in-Fact
A spouse, child, grandchild, or close friend may make an appropriate attorney-in-fact. You can choose any adult of sound mind that you believe to be responsible and trustworthy enough to act on your behalf. Don’t choose someone who could have any conflict of interest with your wishes, such as someone who works for your doctor.
The attorney-in-fact will ideally live near you or be able to reach your geographical area quickly if necessary. You should also choose at least one backup in case your attorney-in-fact predeceases you or is otherwise unable to act on your behalf when the time comes. Be sure to verify that anyone you want to name as an attorney-in-fact is willing to take it on.
One very important part of creating a POA is sharing your wishes with anyone you’ve named as an attorney-in-fact. Talk about how you want your end-of-life decisions to be made. Do you want doctors to use any means available to prolong your life, or would you prefer to let nature take its course? You may also want to discuss your preferences regarding your funeral and/or cremation (the Neptune Society can also be informative regarding this), but remember that since a POA ends when you die, your attorney-in-fact won’t necessarily be the person in charge of handling your afterlife care.
Creating a Power of Attorney
A lawyer can help you draft the kind of POA that works for you, or you can opt to complete the process yourself. Even if you fill out the documents yourself, it’s helpful to have a lawyer review them, if only so he or she can attest to your mental state at the time if there are any questions about your POA later on.
When you’re ready to sign your POA forms, ask two trusted people to sign them as witnesses. The people named as your primary and backup attorney-in-fact typically don’t have to sign. Give a copy of your completed POA to anyone named within it and keep copies in your personal files.
Most states allow residents to use a universal POA form, such as the one offered by the American Bar Association. You can also buy universal POA forms from office supply retailers. These forms are legally recognized in all states except for five: Indiana, New Hampshire, Ohio, Texas and Wisconsin. Residents of those states can find POA forms through websites of the state government or state bar association, or by hiring a local attorney.
Residents of Missouri, North Carolina, South Carolina and West Virginia are required to have POAs notarized. Other states don’t require this, but it’s a wise step to take.
If you move to a different state after completing your POA or if you ever want to update your POA, then you can destroy the originals, send copies of the new documents to anyone named within them, and ask anyone with a copy of the old documents to destroy them. You should also update your POA if any of the people you’ve named within it die or become otherwise incapacitated.
Even if you create a durable POA that you intend to let stand until your death, you may need to create additional POAs that are specific to your bank or other financial institutions. If you hold accounts with a company that doesn’t recognize a general POA, your attorney-in-fact could be denied access to your accounts. Check the POA guidelines of your financial institutions. If any require you to use their in-house POA forms, ask your lawyer to review them before you sign, as the fine print may include clauses that benefit the institution and disadvantage the account holder.