The Importance of a Power of Attorney

When people start planning for the future they most often think of getting a will drawn up to make sure that those depending on them know what their wishes are. While this is certainly an important step, it does not solve every issue. What may be equally important, if not more so, is a Power of Attorney to deal with issues while you are alive.

If you were to die without a will, there would be no way of knowing what your wishes were, and there may be additional costs. Having said that, the laws of intestacy set out a clear path as to what is to happen to your estate. It is certainly not perfect or efficient, but it is relatively straightforward. On the other hand, if you become incapacitated for one reason or another, the path is not only murkier, it leads to significant expenses, time consumption and hardship. Much like a will, the Power of Attorney can alleviate much doubt and make the process of handling your affairs significantly easier for your loved ones.

There are two kinds of Powers of Attorney. The first is the Springing Power of Attorney. This is a Power of Attorney that is executed but is not in effect until the occurrence of a certain event. This event will be spelled out in the Power of Attorney document. The common example is the incapacity of the Donor, which would be confirmed by a doctor. Prior to this occurrence, the Power of Attorney would have no effect. This allows the Donor to live with the peace of mind that no one can conduct any business on his or her behalf unless and until the Power of Attorney document gives such authority.

The second is the Enduring Power of Attorney. This version comes into effect the minute it is signed. From that moment, your Attorney is vested with all legal rights that come with being a Power of Attorney. While the Power of Attorney is a powerful tool, both types of Powers of Attorney are fully revocable which means that you, as the Donor, can change or cancel your Power of Attorney at any time as long as you are deemed mentally competent. In addition to being revocable, the Power of Attorney can name a single or multiple Attorneys. This allows the Donor to empower who they wish whether that be a single individual or multiple people.

 One of the main benefits of a Power of Attorney is that it allows your loved ones to circumvent costly applications to the Court in order to appoint someone to be in charge of your assets. This process is known as committeeship. Once a person has been appointed by the Court, that person will be required to periodically do a review of accounts and have all transactions approved by the Court. Some things, such as the sale of any land, require special court approval, this is an expensive and time consuming process that can be avoided by the existence of a Power of Attorney.

Quite simply not having a Power of Attorney is rolling the dice with your future. If the need ever arose to use the Power of Attorney, the savings in terms of time, money and the emotional toll would be enormous. If the need never arises, you are at the very least provided with piece of mind. It is our strong recommendation that when planning for your future you not only complete a will, but you supplement that with a Power of Attorney.