What is the Power of Attorney and How to Gain It?
It’s likely that you don’t have a power of attorney. However, it is essential to have a POA if you legally want to make financial decisions for your loved ones.
Peter is an elderly father of two sons and a daughter. His wife is no more, and he is the only one who looks after the children. However, one night, on his way back home, he was nearly met with an accident. Peter barely survived the deadly car crash. He got lucky this time. But, he knew that he may not always be lucky as he realized that life is too uncertain.
After getting home safely, he started to wonder. What if he had a deadly accident and was in a critical condition? Who would be taking the necessary financial and medical decisions for him? He told his eldest son Eric about the incident. Eric suggested that this is where a power of attorney could have helped Peter.
So let’s see what is power of attorney, why one should get it, and how to set it up.
What is the Power of Attorney?
A power of attorney is a legal document that permits you to appoint someone to make legal and financial decisions on your behalf if you cannot do so. Suppose you are not in a stable condition to make financial decisions due to an injury or other health problem. In this case, you may require the assistance of someone who can do that for you. The POA will enable the designated person to make decisions on issues, such as ensuring that the bills are being paid and medical decisions are adequately made.
The individual authorizing someone to manage their affairs is referred to as the principal, and the person working on their behalf is referred to as the agent. It is crucial to remember that POAs are generally governed by state law, with minor variations across states. However, while establishing a POA, it is necessary to consult with an attorney familiar with the legislation in your state.
You should also be aware of the limitations of a POA. A POA only authorizes someone to perform what is agreed upon in the agreement. If your parent forms a power of attorney granting someone the authority to act on their behalf, they will still remain eligible to act on their own behalf, given that they retain the physical ability to do so. The agent does not have the complete authority to act and make choices on behalf of the principal.
Moreover, agents must operate in a fiduciary relationship. This implies that if you are your parent’s power of attorney, you must handle their interests for their advantage, not your own. The Consumer Financial Protection Bureau provides information on the legal obligations agents accept when they sign a power of attorney. Keep in mind that the agent’s authority is restricted as per the document and permitted by the state.
There are various types of POAs, and the power of agents also varies accordingly. Therefore, it is essential to understand and research the type of POA that you require.
Why Should You Consider to Seek Power of Attorney for Elderly Parents?
A power of attorney grants the authority of handling your parents’ affairs to someone else. As parents become older, it becomes necessary to be ready for any potential health concerns and prepare beforehand for what life may throw at us. The POA enables the agent to step up to the occasion when needed. Life is unpredictable, and you just never know how things can change.
The following are some common reasons that show why we should consider seeking power of attorney for elderly parents:
1. Financial Problems: A POA grants you permission to look after the financial affairs of your parents, such as paying the bills when they struggle to meet those obligations.
2. Chronic Health Problems: Elderly parents often suffer from chronic illnesses, limiting their ability to oversee their own affairs. In such cases, a POA will allow you to manage those affairs for your parents while they can concentrate more on their health. POAs can be arranged for both terminal or non-terminal health issues.
3. Regular Travel: Elderly parents often choose to travel regularly after their retirement or during their holidays. In this case, a POA can be very handy. Using a POA, they can make sure that the financial obligations in their home state are being properly managed in their absence.
4. Memory Loss: A POA is highly essential for parents suffering from Alzheimer’s disease or dementia. However, it is important to ensure that the process and paperwork are completed while the parents are still in full control of their faculties.
5. Imminent Surgery: Using a medical POA, the parent can permit their children to make the medical decisions for them while they’re under anesthesia or recovering following surgery. The POA will also make sure that the financial affairs are also being taken care of while the patient is still recovering.
How to Set Up the Power of Attorney For Your Elderly Parents?
Now that you know what a power of attorney is, you need to know how to set up the POA. Many states have elder law experts ready to provide elders with free or low-cost consultations. These attorneys have strong expertise in preparing a power of attorney papers and extensive knowledge about local legislation.
You can follow the steps below to set up the POA for your parents:
Have a Good Discussion with Your Parents: Getting a power of attorney for your parents is a great opportunity to discuss their desires concerning their finances and healthcare. You must make sure that you have their consent and they fully agree with what has been discussed.
Consult with a Lawyer: People’s needs can vary from one person to another, and the law also differs from one state to another. Therefore, it is of paramount importance to get assistance from a lawyer. Thus, you can ensure that legal procedure is followed and the wishes of your parents are also considered.
Prepare the Required Documents: Make a list of all the clauses that describe how the agent can act on behalf of the principal. This guarantees that your parents’ desires are understood and obeyed. Although there are POA templates available on the internet, these are generic documents that may not withstand legal inspection and may lack some of the provisions or clauses you want.
Execute the Agreement: Have the documents properly signed and notarized. The requirements for witness and notarization can differ from state to state. So ensure that you know what the requirements are in your state and fulfill them accordingly.
Now that you know about the Power of Attorney, you should really consider getting one for your loved ones. The POA can help ease the stress on the mind of your loved ones and give them some peace. Life is uncertain. So it’s always better to be safe than sorry.