Are you prepared? If something happens to you, like an accident or illness and you are not able to carry on your affairs for a little while or a long while, what would your family do in the meantime?
A power of attorney is a legal document that any attorney should be capable of drafting for you. In fact, we have provided this tip a time or two in past newsletters; however, after our experience over the last few years where we saw individuals isolated in hospitals and nursing homes and unable to communicate with family, we thought a discussion on powers of attorney may be timely and appropriate.
So, what is a power of attorney (POA) and why do you need one? A POA is a legal document that gives someone else (your agent) the power to act for you (the principal). This document may give broad powers to your agent or you may restrict the document to only a few specific powers. A spouse naming the other spouse or a parent naming an adult child as agent are two common agency examples. Your agent will be able to legally step into your shoes and carry on the business you would handle if you were able or willing.
Your business includes things like dealing with your bank or financial institutions, filing lawsuits or making claims against debtors that owe you or that you owe, talking about benefits owed to you with the government, civil or military entities, dealing with your retirement plans, insurance and other areas that you would address if you were able.
A common question we get is: “Well, I’m not giving all my power to make decisions to my son. Not while I still have my good mind, anyway.” The good news is a POA does not revoke any of your own power. You may still act or not act, as you choose. The POA is more of a convenience document to use when you need to or want to use it. As long as you have sound mind, the POA is easily revocable. If your agent is not doing a good job for you, then you may revoke the POA and make a new one. In addition, you can make your POA contingent upon incapacity, so that the agent would have no power until your doctor has declared you unable to handle your own affairs.
What happens if I’m in a car accident, I am temporarily totally incapacitated and I do not have a POA? If the matter is urgent, cannot be delayed and requires your immediate participation, then the alternative would be filing a petition in court for the appointment of a guardian over your person and conservator over your property. This proceeding is expensive, takes time and does revoke your own ability to make decisions, as the court would have to find you to be legally incapacitated. In addition, the court has the power to require the person appointed to be bonded based on the value of your estate. While bonds are normally not terribly expensive, they are not free and it is another hoop the person helping you would have to jump through. Further, we have had petitioners in such matters denied bond because of a recent bankruptcy filing. On the other hand, you could have a POA in place and tell your agent where it is if he or she ever has need of it.
Finally, if you have a Georgia POA that is older than 2017, you may want a new one drafted. In Georgia, there were significant changes made to the power of attorney statute and, while an older POA would likely still be honored, a new one would remove that concern.
In sum, this legal tip is: make sure you have a POA in place now to avoid problems later if you become permanently or temporarily unable to address your own affairs.
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The information contained on this newsletter/blog/legal tip is for informational purposes only. It is NOT intended to provide legal advice. Terms, law and conditions may change without notice. Nothing in this newsletter/blog/legal tip shall be deemed to create an attorney-client relationship. For information specific to you or your case, you should hire an attorney for legal opinions or legal advice.