What is a Power of Attorney?
The Attorneys at Rick Stock Law can assist you with all your Estate Planning needs. A Power of Attorney (POA) is a legal document that gives an individual (an agent) the authority to act on behalf of someone else (a principal)
The Agent can have either extensive or limited authority to make legal decisions about the principal’s personal property, bank accounts, finances, or healthcare depending on the type of Power of Attorney. These documents can be limited in nature (only covering a certain time period) or durable (lasts for a lifetime unless you revoke it). They can go into effect immediately after signing or after occurrence of a specific event in your life.
When is a Power of Attorney useful?
Not surprisingly, most people set up Power of Attorneys when they are elderly and or if they are facing a serious, long term health crisis. Estate Planning isn’t something that people should only do once they are elderly. The best time to do estate planning is during the years before you’ve acquired a large estate. Certain situations can trigger the desire for a Power of Attorney to go into effect. Suppose you are in the military and intend to spend time overseas? Who will pay your bills? Who will pay your rent and other required expenses? Maybe you were arrested and are heading to prison? Maybe you are simply going away to college. Regardless of what the event is, Power of Attorneys serve a significant purpose in allowing someone to act on your behalf when you are unavailable to act on your own behalf. Younger people who travel a great deal might set up a POA so that someone can handle their affairs while they are unavailable, especially if they are not married.
Why do I need a Power of Attorney?
Two very important documents in estate planning are Health Care Power of Attorneys and Durable Financial Power of Attorneys. But how are they different? The simple answer is that the financial Power of Attorney governs legal and financial matters while the health care power of attorney deals with your health care decisions. Nominating a friend or loved one to be your “agent” by executing a Power of Attorney can make life much easier than the alternative—initiating a Guardianship action through the court. Power of Attorneys are significantly cheaper and survive after you become incapacitated up until your death. If you become unavailable or incapacitated, your agent can transact business on your behalf. Whether you are traveling, in prison, or in a surgery, or just want help with some legal matters, your agent can write checks, pay your bills, or authorize medical procedures. Having these documents as part of your plan can make things much easier for your loved ones to take care of you as you age. Parents often need help with financial and medical decisions especially when considering to move into a senior living home. In situations where a loved one is suffering from dementia or Alzheimer’s, having these documents can make life much less stressful.
Should my college aged child have a power of attorney?
What if your child is away at college and ends up in the hospital as a result of a car accident while out with friends. It’s horrible to imagine, but the situation could be worse. If your child is over 18 (which most college students are), you may not even get the information about their medical status unless your child has filled out the appropriate forms beforehand. If they happen to be unconscious, it’s unlikely that those forms will be completed, leaving you completely in the dark due to HIPAA (Health Insurance Portability and Accountability act) rules and regulations. This entire situation could be prevented with advance preparation of a healthcare power of attorney. Not only can Rick Stock Law prepare a healthcare power of attorney for you, but we also frequently prepare HIPAA authorizations for your student to sign in advance, allowing you to receive your child’s medical records. The power of attorney form allows you to make their medical decisions if they can’t speak for themselves.
Not just the medical power of attorney is useful to a college aged student. A signed Financial Power of Attorney allows you to assist your child with paying their bills while they are away at school, possibly in a different state. It allows you to manage their debts and assets. The most interesting aspect to college is that while a parent is allowed to pay their child’s tuition, they generally are not advised if there is a problem with financial aid or if there is an unpaid balance on the child’s account at the school. The school will accept the money, but won’t tell you how much you owe unless your child asks. A financial power of attorney ends this unnecessary stress.
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