(Please understand that the answers to these questions are general in nature and may not cover every individual situation.)
Wills and Trusts take care of your stuff after you die. But what about between now and then? What about when you are unable to make the decisions for yourself? This is where Powers of Attorney come in. They give a third party rights to act in your name in certain circumstances. There are two general areas where Powers of Attorney may be needed:
Health and Medical
What happens when you get into a serious car accident and are left unconscious or unable to communicate? What does the doctor do if he can’t talk to you about options? Or what happens when a parent’s mind starts to go and they are slipping into dementia? These are some of the reasons a medical Power of Attorney can be useful. Utah has a Healthcare Directive that is quite respectable. It goes through the issues mentioned above, having you determine agents and how you want to be treated at the end of your life. You really should have one of these, because someone may have to file a guardianship action with the courts if you don’t. Something as simple as getting access to medical records can be very difficult without this type of Power of Attorney. I take care of guardianships regularly, and most would have been prevented with a simple, inexpensive Power of Attorney.
Many of the same arguments can be made regarding your finances. What happens when you can’t write your own checks anymore? A financial power of Attorney gives a third party the right to act for you. Is that always a good idea? Unlike a Medical Power of Attorney which only comes into play if you can’t talk for yourself, a Financial Power of Attorney generally gives that power now, though they can be written to “spring” into existence upon you becoming incompetent. If you are married and have all of your accounts and property in joint tenancy, you may not need one now. If you are single or widowed, it is generally better to use a power of attorney than adding a child to your checking account. Why? The most common problem comes by adding a child as a joint owner. The moment that occurs, the money is as much the child’s as yours. Their creditors can attack your account to pay the child’s bills. Further, when you die all the money in the account belongs to the survivor and is not part of your estate. A power of attorney keeps things clear that the child is acting only in your behalf and does not own the asset. If you lose the ability to manage your finances and do not have a power of attorney, a court action is necessary to appoint a conservator and, just as above, it will cost many times more in money and grief than having a power of attorney available.
So many problems with Guardianships and Conservatorships could be avoided with simple Powers of Attorney. They are simple, quick, and effective. As the saying goes, “an ounce of prevention is worth a pound of cure.” In few places is that saying more applicable than here. Rather than forcing your loved ones to fight for control if you become incapacitated, take the time now to prepare. It will make things much easier during what will undoubtedly be an already hard time.
Contact us today to get your Powers of Attorney started!