Power of Attorney

A power of attorney is a legal instrument that allows you (the "principal") to designate another person (the "agent" or "attorney-in-fact") to make decisions and take actions on your behalf. Powers of attorney can be broad or limited in scope, and they serve an essential role in planning for situations where you may be unable to manage your own affairs.

There are several types of power of attorney. A general power of attorney grants broad authority over financial matters, including managing bank accounts, paying bills, buying or selling property, and handling tax filings. A limited or special power of attorney restricts the agent's authority to specific actions or time periods. A healthcare power of attorney (also called a healthcare proxy) authorizes someone to make medical decisions on your behalf if you are unable to communicate your wishes.

The distinction between a "durable" and a "non-durable" power of attorney is critical. A durable power of attorney remains in effect even if the principal becomes mentally incapacitated. Without the durable designation, the power of attorney could become void precisely when it is needed most. Most estate planning attorneys recommend establishing a durable power of attorney as part of a comprehensive plan.

Without a power of attorney in place, your family may need to go through the court system to obtain a guardianship or conservatorship in order to manage your affairs if you become incapacitated. This process can be time-consuming, expensive, and stressful for your loved ones. It also gives the court, rather than you, the power to decide who will make decisions on your behalf.

When choosing an agent, it is important to select someone you trust completely, as the agent will have significant control over your finances or healthcare decisions. Many people choose a spouse, adult child, or trusted family member. It may also be wise to name a successor agent in case your primary agent is unable or unwilling to serve when the time comes.