While your living trust or will is a very important document, a comprehensive estate plan goes beyond just a plan for distributing your assets upon your death. Another essential component of a complete estate plan is power of attorney, which ensures that you have a person of your choosing to make decisions for you in the event you become incapacitated.
A power of attorney is the legal document where you, as the “principal”, designate another person, or group of people, as the “agent(s)” authorized to make decisions or take action on your behalf. Powers of attorney may be extremely narrow or broad. In the estate planning context, powers of attorney are typically quite broad. That’s because these powers are the most necessary once you’ve lost the capacity to make decisions for yourself and, if that happens, they are equipped to make sure that the person you desire is empowered to make virtually any decision on your behalf.
These powers may govern financial and other property matters or may pertain to health care decisions. In the context of estate planning powers of attorney, these powers are almost always “durable”. A durable power of attorney remains effective even after you become incapacitated. This is essential since, in most cases, the occasion of your incapacity is exactly the point at which you’ll need your powers of attorney.
The law creates a degree of flexibility regarding how you structure your powers of attorney. You can have powers of attorney that become effective as soon as you sign them, or that only take legal effect once you become incapacitated. You can designate the same agent, or agents, to make your financial decisions and health care decisions, or you can name completely separate people to serve in each capacity. You may assign one person as your agent, or you can designate a group of people to serve. If you designate a group, your power of attorney can require all of them to agree before they may act, dictate that a majority of them must agree, or state that any one of your co-agents can act on your behalf.
Powers of attorney are an integral part of an estate plan, regardless of your age. The cases of Sharon Kowalski, from Minnesota, and Patrick Atkins, from Indiana, point out the profoundly negative potential outcomes that can come from persons in same-sex relationships failing to plan. In both Kowalski and Atkins’s cases, severe medical traumas left them permanently incapacitated, and, also in both cases, family members used the medical tragedies to attempt to shut their partners out of their lives. Neither had powers of attorney in place. Additionally, powers of attorney can be extremely beneficial to seniors, as protection against incapacity brought on by Alzheimer’s disease or other dementia.
As should be clear from the options listed above, there is a multitude of legal options available to provide for each person’s wishes and needs. The attorneys at Krause Donovan have extensive knowledge of estate planning law, including powers of attorney. Request a consultation with one of our experienced attorneys to receive detailed and thoughtful advice about what plan best suits your circumstances.