What Is A Power Of Attorney And Why Do You Need One?

Biernacki & Associates, P.C. | Your Experienced Power Of Attorney Law Firm In Pittsburgh, PA

A power of attorney is a legal document created by you (the “principal”) that designates a trusted adult (the “agent”) to make decisions on your behalf should you be unavailable, unable or incapacitated. You define the type of decisions your agent will make: medical, personal, legal, financial or business-related.

To create an enforceable power of attorney:

• You must be mentally competent when you sign it
• The document must include specific notice and acknowledgment language regarding the powers you’re authorizing and the responsibilities your agent is agreeing to undertake
• The document must be signed and dated by you and your authorized agent
• The document must be witnessed and signed by two adults and a notary

A primary advantage of having a power of attorney is that it allows you to grant specific powers to a trusted person without ceding complete control of your affairs. You decide how broad or limited your agent’s powers are, the type of decisions they’ll make and the conditions under which they make them.

What Is a Durable Power Of Attorney?

A durable power of attorney remains in effect or is “durable” even after you become incapacitated. In other words, if you were suddenly mentally or physically incapable of making your own decisions, your designated agent would still have the authority to act on your behalf. By contrast, “general” or “limited” powers of attorney terminate upon your incapacity.

Durable powers of attorney are typically contemplated and used for long-term planning where incapacity may be due to an illness, stroke or dementia. They anticipate the crucial financial and healthcare decisions that typically arise and must be made in these situations.

How Does A Financial Power of Attorney Differ From A Healthcare Power of Attorney?

While a financial power of attorney and a health care power of attorney serve different purposes, they share a common goal: providing you peace of mind about an uncertain future.

A financial power of attorney authorizes your agent to make decisions about your finances. These may be decisions about your bank and retirement accounts, investments, real estate, taxes or government benefits. A financial power of attorney is typically effective upon signing unless provisions are made for it to become effective pending incapacity.

A healthcare power of attorney authorizes an agent to make medical decisions in your stead if you lack capacity. Those may be decisions about your medical treatment, life-sustaining measures, where you’re treated and end-of-life decisions. The health care power of attorney is usually paired with a living will, a document that specifies your preferences and instructions for medical treatment in advance when you are incapacitated.

How Do You Select The Most Appropriate Agent For Your Power Of Attorney?

Choosing an agent is a powerful and weighty decision. Because you are granting this person authority to make critical life decisions on your behalf, you need to feel confident that they are trustworthy. You also need to know whether they have the time and willingness to do the job. For these reasons, you may choose a family member or friend.

Equally important is the ability to do the job and do it well. Making intelligent choices regarding your finances, business or medical treatment that accurately reflect your wishes requires knowledge and competence. You may trust someone to make these decisions, but what if they lack the skill set?

Ultimately, choosing an agent is about finding someone you trust, who has the requisite skills and who will represent your best interests.

What Can Happen If You Don’t Have A Power of Attorney?

If you don’t have a power of attorney and you become incapacitated, you leave your health and financial affairs in a state of uncertainty. You also leave your family to guess at or argue about your intentions. Ultimately, they will have no choice but to begin the costly and lengthy legal process of petitioning the court to appoint a guardian. This can result in someone you didn’t want, expect or trust handling your affairs.

Meanwhile, your finances can be frozen, bills will go unpaid, and life-saving or life-sustaining treatments will be delayed.

When Is The Best Time To Update Or Revise Your Power of Attorney?

Any major life event or change can be a reason to consider updating your power of attorney. Perhaps your agent can no longer serve or doesn’t want to. Maybe there have been significant life events that affect your wishes and intentions – births, deaths, divorce, re-marriage or adoptions. Substantial changes in your finances, health or aspects of your estate plan are also reasons to consider updating your power of attorney.

Still Have Questions About Powers Of Attorney? Call Today!

Biernacki & Associates, P.C. has decades of experience helping clients like you create a power of attorney that authorizes someone you trust to make decisions that reflect your wishes when you’re not able. For more information, contact us or call us today at (412) 557-7726 for a free initial consultation.