4 Reasons to Revisit your Powers of Attorney

Posted on April 30, 2021April 30, 2021 by CCG

Although much of estate planning deals with what happens after you die, it’s equally important to have a plan for making critical financial or medical decisions if you’re unable to make them for yourself.

Carefully designed financial and health care powers of attorney allow you to designate a trusted person to make financial and medical decisions on your behalf in the event an illness or injury renders you unconscious or otherwise incapacitated. They also allow you to provide your designee with guidance on making these decisions, including your preferences regarding the use of life-sustaining medical procedures.

Review and revise as needed

Powers of attorney can provide peace of mind that your wishes will be carried out, but it’s important not to get lulled into a false sense of security. You should revisit these documents periodically in light of changing circumstances and consider executing new ones.

Possible reasons you may need new powers of attorney include:

Your wishes have changed.
The person you designated to act on your behalf has died or otherwise become unavailable.
You’re no longer comfortable with the person you designated. (For example, perhaps you designated your spouse, but have since divorced.)
If you’ve moved to another state, your powers of attorney may no longer work the way you intended. Certain terms have different meanings in different states, and states don’t all have the same procedural requirements. Some states, for example, require durable powers of attorney to be filed with the local county recorder or some other government agency.

Honoring your powers of attorney

Even if your circumstances haven’t changed, it’s a good idea to execute new powers of attorney every few years. Why? Because powers of attorney are effective only if they’re honored, and — because of liability concerns — some financial institutions and health care providers may be reluctant to honor documents that are more than a few years old.

Contact us with any questions regarding powers of attorney. We’d be pleased to further explain how they work or, if your estate plan already includes powers of attorney, help determine if you need to revise them or execute new documents.

A health care power of attorney is an essential element of any estate plan

Posted on September 21, 2020September 21, 2020 by CCG

What happens if illness, injury or age-related dementia renders you unable to make decisions or communicate your wishes regarding your health care or financial affairs? Unless your estate plan addresses these situations, your family may be forced to seek a court-appointed guardian. Health care arrangements are particularly important because your wishes won’t necessarily coincide with someone else’s judgment about what’s “in your best interests.”

To help ensure that your wishes are carried out, create a health care power of attorney (HCPOA). Sometimes referred to as a “health care proxy” or “durable medical power of attorney,” an HCPOA appoints a representative to make medical decisions on your behalf if you’re unable to do so.

Choose a representative

Who should be your representative? The natural inclination may be to name your spouse or an adult child. This may be the right choice, but not always.

Consider whether the family member has a differing view on when to continue or terminate life-sustaining measures or would find it too difficult to make such decisions. Designate someone you trust to carry out your wishes.

Detail your health-care-related wishes

Your HCPOA should provide guidance on how to make health care decisions. Although it’s impossible to anticipate every potential scenario, the document can provide your representative with guiding principles.

For example: What are your desired health outcomes? Is your top priority to extend your life? Is artificial nutrition or hydration an option? Under what circumstances should life-sustaining treatment be withheld or terminated?

Additional documents

Another important document to have in place is a living will — which communicates your preferences regarding life-sustaining medical treatment in the event you are dying of a terminal condition or an end-stage condition. Also consider a revocable trust and durable power of attorney to provide for a trusted representative to manage your financial affairs in the event you’re unable to do so.

Unleash the power of a nonspringing power of attorney

Posted on November 28, 2018June 4, 2019 by Justine O'Sullivan

Estate planning typically focuses on what happens to your children and your assets when you die. But it’s equally important to have a plan for making critical financial and medical decisions if you’re unable to make those decisions yourself. A crucial component of this plan is the power of attorney (POA) • specifically, a nonspringing POA.

POA defined

A POA is a document under which you, as “principal,” authorize a representative to be your “agent” or “attorney-in-fact” to act on your behalf. Typically, separate POAs are executed for health care and property.

A POA for health care authorizes your agent — often, a spouse, child or other family member — to make medical decisions on your behalf or consent to or discontinue medical treatment when you’re unable to do so.

A POA for property appoints an agent to manage your investments, pay your bills, file tax returns, continue your practice of making annual charitable and family gifts, and otherwise handle your finances, subject to limitations you establish.

Benefits of a nonspringing POA

A nonspringing or “durable” POA is effective immediately, regardless of the circumstances. Because it’s effective immediately, it allows your agent to act on your behalf for your convenience, not just when you’re incapacitated. A springing POA, on the other hand, becomes effective only when certain conditions are met.

In addition, a nonspringing POA avoids the need for a determination that you’ve become incapacitated, which can result in delays, disputes or even litigation. This allows your agents to act quickly in an emergency, making critical medical decisions or handling urgent financial matters without having to wait, for example, for one or more treating physicians to examine you and certify that you’re incapacitated.

Disadvantage of a nonspringing POA

A potential disadvantage of a nonspringing POA — and the main reason some people opt for a springing POA — is the concern that your agent may be tempted to abuse his or her authority or commit fraud. But consider this: If you don’t trust your agent enough to give him or her a POA that takes effect immediately, how does delaying its effect until you’re deemed incapacitated solve the problem? Arguably, the risk of fraud or abuse is even greater at that time because you’re unable to protect yourself.

Given the advantages of a nonspringing POA, and the potential delays associated with a springing POA, it’s usually preferable to use a nonspringing POA and to make sure the person you name as agent is someone you trust unconditionally.

If you’re still uncomfortable handing over a POA that takes effect immediately, consider signing a nonspringing POA but have your attorney or other trusted advisor hold it and deliver it to your agent when needed.