Power of Attorney

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Individuals can elect to have another person make decisions and sign documents on his or her behalf. Bestowing this authority is known as giving a Power of Attorney. 

The power can be as limited or as expansive as the principal (the person giving the power) decides. The power can also be "Durable" meaning that when the principal is incompetent or incapacitated, the agent will still be able to make decisions.  

There are two categories a Power of Attorney can fall into. The two primary types are a Durable Financial Power of Attorney and Durable Health Care Power of Attorney. 

Financial Power of Attorney

During life, you may select an individual to make financial decisions on your behalf if you are unable to do so. A Durable Financial Power of Attorney can be as broad or as limited as you prefer, even limited to a particular date or purpose.

There are two options for the effectiveness of this power: 1) the appointed individual can be immediately able to act on your behalf or 2) the appointed individual will only be able to act on your behalf if you are disabled or incompetent (also known as a Springing Power of Attorney). This is a matter of preference for each individual; the choice will depend on each person’s specific needs and preference.

If you are incapacitated, without a Durable Financial Power of Attorney, a family member or friend will have to apply to the Probate Court to be appointed as your Guardian. The cost and time required for a Guardianship is tenfold compared to appointing a Power of Attorney.  Further, the Guardianship process can be contentious if there are competing parties.

For small business owners, it is especially important to have a Power of Attorney reserved for a trusted co-owner or family member.

Health Care Power of Attorney

A Healthcare Power of Attorney grants authority to make medical decisions if you are in a coma or become mentally incapacitated. Within this Power will be specific guidance as to what your wishes were before becoming incompetent.

Without a Healthcare Power of Attorney, a family member or friend will have to apply to the Probate Court to be appointed as your Guardian. The Guardianship process can be contentious, expensive and time consuming.

Why is it important for adult children to have a Healthcare Power of Attorney?

If an adult child were in an accident, parents may not be able to receive medical information from the treating physician or hospital. Further, when a child reaches age 18, you cannot make decisions for them unless they have given you that power.