Life is an unpredictable thing. At times, it can seem as though all our plans are pretty much on track, and our most important goals seem well within reach. Other times, various disruptions cause those plans to be sidetracked for a time or altered to accommodate new circumstances. And then there are those times when something so life-altering occurs that even our most well-laid strategies for achieving our goals suddenly seem to be shattered beyond recognition.
Take, for example, incapacitation. Far too many of us have never seriously thought about what happens in the event that we are suddenly left without the ability to make our own financial and medical decisions. Do you have a plan in place to address those critical issues that could leave your family, your estate, and your healthcare needs at risk should the worst ever happen to you? If you haven’t addressed these critical concerns yet, then it is important to understand why you can’t afford to neglect power of attorney in your estate planning efforts.
When Incapacity Strikes
Like most people, you probably don’t want to even consider the possibility that something could happen which would leave you in a state of incapacitation. Unfortunately, that unpredictability that so characterizes life means that disaster could strike at any moment. A car accident, a serious illness, or even some form of dementia could come into your life with little or no warning. You could be left in a state where you are unable to make even the simplest of decisions on your own. And with no legal plan in place, where would that leave your family and your estate?
It is crucial to understand how a lack of sensible planning can impact you when disease, illness, or accidents occur and you can no longer manage your own affairs. Without a plan to cope with such occurrences, your decision-making authority would have to be passed onto another person. Your failure to name someone to make those decisions on your behalf would mean that someone else would have to appoint an agent to represent your interests. That task would fall to a probate court judge.
In cases where no designated agent has been appointed by you, the court would have to examine the issues and identify someone that it could appoint to serve as a guardian or conservator to act on your behalf. While that process usually entails an effort to locate a close family member willing to serve in that role, that is not always as easily accomplished as it might sound. Sadly, there are times when the court may actually choose someone you never would have considered to be fit for the job.
To make matters worse, there are some guardianship cases that can drag on for far too long – particularly if there is some dispute over who is going to act in that capacity. The entire process can be emotionally painful and exhausting for your family, and the monetary costs can sorely impact the value of your estate.
Why Power of Attorney is Critical
There is good news, however, in that all of those negative consequences can be avoided with some sound planning on your part. In addition to a Last Will and Testament, Living Trust, and other estate planning tools, you should also be sure to include documents to provide Power of Attorney to a trusted person or persons who can act in your interests if you lose the capacity to make important decisions yourself.
If properly-crafted Power of Attorney documents have been written, then your incapacity will serve as the trigger that authorizes your designated agent to begin making decisions for you. You’ll need Durable Power of Attorney documents, and will have to decide whether you want them to be in effect right away, or only after you become incapacitated. The second option – referred to as a Springing power of attorney – basically has no power until you lose the ability to manage your own affairs. Many people choose that option for that reason.
Essential Documents You Need
There are, of course, specific documents that need to be crafted for these types of incapacity situations. You’ll need the following legal authorizations to ensure that your agent can act on your behalf with all the authority needed to protect your interests:
- Durable Financial Power of Attorney. This document names a designated representative – typically a spouse, trusted family member, or friend – to make financial decisions related to your accounts and the rest of your estate. That agent will be empowered to sign your name for financial purposes, manage your accounts, pay your bills, invest your assets, and so on. It is an awesome responsibility, so choose your agent wisely.
- Advance Directive for Health Care, which is also known as a Durable Power of Attorney for Health Care. This document designates someone to serve as an agent representing your health care interests. He or she will speak and act with all the authority you typically have when it comes to matters related to your treatment and care. When you make out an Advanced Directive for Health Care, you are providing instructions for your care that your agent can enforce as though you were speaking on your own behalf. Include the type of care you want to receive as well as your wishes on matters like life-sustaining technology and resuscitation.
3.HIPAA Release Authorization. Thanks to the Health Insurance Portability and Accountability Act (HIPAA) signed in 1996, you need to provide HIPAA authorization for anyone you want to have access to your medical records and information. That prevents the medical staff from denying your agents and family critical information about your condition that they will need to make sound decisions.
Professional Assistance Matters Too
Of almost equal importance in all of this is the fact that you need to have these documents prepared properly. That most commonly means that you will need to retain the services of a competent attorney with experience in all of these estate planning matters. At Fouts Law Group, LLC, our attorneys have the expertise you need to ensure that your estate plan contains all of the essential components necessary for preserving your best interests when incapacity strikes. Contact us at our website or call us at (678) 242-8344 to find out more about how power of attorney can help to complete your estate planning efforts.
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