What Powers of Attorney Can Do For You
Powers of Attorney are one of my favorite efficient, effective estate planning tools to help my clients protect themselves and the people they love.
There are two types of powers of attorney - medical (aka healthcare power of attorney) and financial (also called durable power of attorney).
Financial powers of attorney ensure that you are able to have someone you trust make financial decisions and take necessary actions to protect your money and property if you lack capacity to do so yourself. With this legal document, you designate someone you trust to make monetary decisions and take actions on your behalf if you are unable to do so yourself, such as continuing house payments from your checking account if you were in a car accident, or paying your hospital or other bills for your from your bank account.
A medical power of attorney is a legal document that allows you to designate someone you trust to make decisions about your medical care in case you become incapacitated, such as getting in a car accident and becoming unconscious, or losing your memory and ability to make decisions for yourself from dementia.
I often suggest clients accompany powers of attorney with a Living Will, which gives specific instructions to your doctor and healthcare power of attorney about what how you would like them to make these kinds of emergency healthcare decisions — for example, whether you would like to receive CPR or not.
But what if someone abuses that power? As they say, with great power comes great responsibility — Under Arkansas Code Title 28, Chapter 68, people who agree to act as someone’s financial or medical power of attorney are legally required to act in that person’s best interest. Violating this duty by can lead to civil liability and/or criminal penalties, as outlined in Arkansas Code Section 5-28-103. People who agree to be someone else’s power of attorney are required by law to act loyally and keep a record of all receipts, disbursements, and transactions made on behalf of the principal.
Powers of Attorney are one of the quickest and easiest ways to “cover your bases” and make sure that a trusted friend or family member will be able to take care of your affairs if you are alive but no longer capable of handling financial or medical decisions on your own. Unfortunately, the alternative to executing powers of attorney before incapacity is often needing to seek a temporary or permanent guardianship after incapacity, which can be a long and more expensive process due to the complexity of the case and multiple required court hearings.
My office is happy to help with these guardianship cases as well, but many of my guardianship clients would tell you — it would have been so much easier to get powers of attorney done a long time ago rather than wait until an emergency required court intervention in the middle of a loved one’s rapid decline. Powers of attorney can only be created while someone still has mental capacity. Of course, for people with existing disabilities or children with special needs, guardianships may be the only option to allow a caregiver to take all actions necessary to give that person the care they need. For more information on Guardianships, see this article on Guardianship: When It’s Needed and What to Expect.
A free phone call consultation can help you understand what you and your family need to be protected and set up for success, without the extra fluff you don’t need and shouldn’t pay more for. Call my office today, I’m happy to help!
