While most of us have heard of a power of attorney, or POA, many have misconceptions about them. The Lubbock Avalanche-Journal’s recent article entitled “Five common myths about powers of attorney” explains away some misconceptions about POAs.
- There’s just one uniform power of attorney document. No, there are many types. However, they can vary by state. Our experienced estate planning attorneys draft these documents to meet your specific needs.
- It’s OK to sign a power of attorney, even if I lack mental capacity. No, to be valid, the person granting the rights (the principal) must have the mental capacity to execute the document. A POA can be valid for an individual with mental incapacity, provided the document was signed before the occurrence. That’s a key reason to have a durable POA in place.
- A durable power of attorney and healthcare power of attorney is the same thing. No, a durable POA grants rights to an agent to act on your behalf, regarding your assets. These rights can be general to all assets for an unlimited time, or the POA can be limited as to the time frame and assets included. A medical POA grants an agent the authority to make medical decisions on your behalf.
- Senior citizens are the ones who need the power of attorney. Not true, because accidents and unforeseen illness can strike at any age. You need to have a plan in place to ease the burden of one aspect of an already stressful and complicated situation. Don’t assume your spouse has automatic power to make decisions on your behalf. It can be much more difficult unless you have given them the POA.
- A power of attorney can be used to handle my relative’s estate at death. Again, not true. Although there are other ways to structure an estate to avoid probate, a POA isn’t one of them. A POA lets the agent stand in the place of the principal to make decisions. It doesn’t continue beyond the death of the principal.
If you avoid these common misconceptions, a POA can be a very useful, and necessary, tool for your estate planning needs. To discuss how these tools can help you and your loved ones during times of incapacity, request a consultation with one of our Madison or Rockford area estate planning attorneys.