Married couples often ask if it is necessary to have powers of attorney when each has a spouse that can be there for them in the event the other becomes incapacitated. While this may seem like a logical solution to keep a couple from setting up powers of attorney, there are several areas where costly problems can arise if you don’t have powers of attorney established. More specifically, a durable power of attorney.
A power of attorney document will enable a person designated as the principal to appoint someone of trust, called an agent, to make specific legal, financial and health decisions on the principal’s behalf. A durable power of attorney becomes active immediately after it is signed and the agent can make decisions on the principal’s behalf whether they are incapacitated or not.
Why is a durable power of attorney important? Because if you do not have durable power of attorney in place, your agent, who is most likely a family member or close loved one, will have restrictions on how they make decisions on your behalf when you are incapacitated. When a durable power of attorney is properly executed, it can prevent critical delays in decision making when the principal suddenly becomes incapacitated or is undergoing mental capacity evaluations.
Having a durable power of attorney in place is also useful so you do not have to risk the possibility of the court appointing a guardian or conservator that could make decisions against your wishes.
Another important part to durable power of attorney is that every activity and transaction that takes place is kept private. If the court needs to appoint a guardian on your behalf, actions that are taken can be recorded and made public.
Delegating powers of attorney can be a very important part of your estate planning. Besides deciding who will act as your agent, you will need to know what their responsibilities are and when they can make decisions on your behalf.