Basics Of Estate Planning
What Is The Financial Durable Power Of Attorney?
A financial durable power of attorney is a legal document that gives someone the right to sign your name, whether it is for managing your bank account, real estate, 401(k), investment accounts, or even disability benefits, social security benefits; all of those can be handled via a financial management power of attorney.
What people really do not understand is that a power of attorney is only good while you are alive; what you are saying is that I cannot do it, so I want you to do it for me. There are a couple types of powers of attorney, one that is good right now, so if you name someone to be your agent, and notarize the document, then they can sign for you right now. There is another type called a springing power of attorney, that you name today to be your agent but they cannot sign anything until you become incapacitated at which point it “springs into action” and the agent can then sign for you.
The springing power of attorney sounds like the greatest thing since sliced bread, except for one problem; how do you determine the test for incapacity and when do you say, “I am incapacitated so you can now sign for me”? There are a couple of different ways; you can have two doctors make a declaration saying you are incapacitated, or you can have a group of about four people that you can choose and decide that, if two of them sign a declaration then you are incapacitated and then the agent can sign for you; in other words, there are many ways to do that. Powers of attorney sound great, but in reality they are difficult because you are giving someone the right to sign your name, which can be abused.
People do not want to think about people misusing a power or attorney, but the reality is that there is more elder abuse surrounding powers of attorney than most other things because, when people are dealing with other people’s money, they get really weird. You have to be very careful when deciding who you want to be your agent on your financial power of attorney because you can cause yourself a whole lot of problems
What is a Healthcare Power of Attorney?
In California, we don’t really have a healthcare power of attorney anymore, although there used to be one, and a separate living will. Since 2001 both have been consolidated into what is called an Advance Health Care Directive, which does what the healthcare power of attorney and living will used to do, but it adds a few more things, such as choosing at least two alternates in case the first agent is not available to make decisions; end-of-life directives, such as whether you want to be stuck on life support or you want to give your agent discretion to take you off at some point. It also allows you to decide whether or not you want to restrict pain management in case of terminal illness. Most people do not want to do that but Christian Scientists do, so that is something you have to discuss with people, along with whether or not you want to be an organ donor, and for what purpose, such as for transplant or for therapy, or for research or you can be cadaver at medical school.
When you face incapacity issues, you want to have a financial management power of attorney and the Advance Health Care Directive and if you do then that will pretty much cover you.
For more information on Power of Attorney, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (858) 278-2800 today.