4 Common Power of Attorney Myths
A durable power of attorney is one of the most important estate planning documents you can have. It allows someone who you appoint (your agent) to make non-medical decisions on your behalf in the event you become incapacitated. If you have not appointed an agent then your friends and family may not have the authority to make decisions on your behalf. In that case, a judge may have to appoint someone for this task, which can require a court process that is expensive and tedious.
While a durable power of attorney (POA) is one of the most common estate planning documents, it is also one of the most misunderstood. This article will break down some of the common myths regarding POAs and help you understand what you need to create a valid power of attorney.
5 Commonly Held Misconceptions About Powers of Attorney
Myth #1: Technology is so great now, there is no need to speak with an attorney, I can just create my own Power of Attorney online.
Truth: POAs are not one-size-fits-all. Each person’s situation is unique. If you use a cookie cutter program it may not cover specific transactions. In order to conduct many financial transactions specific language must be used to grant proper authority. Elder law (Medicaid Planning) attorneys create these documents regularly which gives them valuable experience in unique situations and can make sure you have all your bases covered.
Myth #2: POAs are one-and-done documents. Once I create it I will never have to touch it again.
Truth: POAs are documents that should be updated regularly. Laws change and if you have not regularly updated your documents you may find out too late that your POA is not valid. Further, some financial institutions may not accept a POA that was not updated in the last few years for fear of a lawsuit.
Myth #3: I shouldn’t make my Power of Attorney active until I become incompetent (a “springing” POA).
Truth: While the timing of granting agency through a POA is a matter of personal preference an immediately effective POA should be considered. A springing POA usually requires a finding of incapacity by at least one doctor and sometimes two. However, there may be an emergency where a doctor will not sign off that you are incapacitated. Making your POA effective immediately removes the need for a doctor to declare you incompetent.
Myth #4: I don’t need a POA, I’m young and healthy, plus I don’t have many assets.
Truth: Every individual over the age of 18 should have a power of attorney. You never know when something catastrophic may happen. You need to have a plan in place to take care of you in the event you become incapacitated unexpectedly. If you do not have a power of attorney in place then you have no control over who will be making decisions on your behalf. It can be expensive and time consuming for your loved ones to go through the court to have a guardian appointed by a judge.
McDonald Law Firm is Here to Help.
POAs are absolutely essential documents that everyone should have. It is important to consult an elder law attorney who can examine your unique situation to create your power of attorney and to keep it updated. Please do not hesitate to contact Andre O. McDonald, a knowledgeable Howard County estate planning, special needs planning, and Medicaid planning attorney at (443) 741-1088 for a no-obligation consultation.
DISCLAIMER: THE INFORMATION POSTED ON THIS BLOG IS INTENDED FOR EDUCATIONAL PURPOSES ONLY AND IS NOT INTENDED TO CONVEY LEGAL OR TAX ADVICE.
