Powers of attorney are arguably some of the most important estate planning documents people create. They are also some of the most misunderstood legal instruments.
Many people have an aversion to powers of attorney because they have heard misinformation about these documents. Those who believe inaccurate information about powers of attorney might decline to draft these useful documents for their own protection.
What misconceptions about powers of attorney do many people believe?
People can draft documents when they need them
Perhaps the most common mistake people make when estate planning is procrastinating. They believe the inaccurate claim that they can draft power of attorney documents later when their health begins to decline. However, someone who already has diminished capacity cannot create legally-binding documents at that point. Someone unable to communicate or rendered unconscious by a medical emergency cannot create or sign legally binding documents. Powers of attorney generally need to be on record long before someone’s health reaches a point where they become necessary.
Powers of attorney take effect immediately and have authority indefinitely
Some people don’t want to create powers of attorney because they believe the document grants their selected agent immediate control over their medical needs or financial resources. Typically, powers of attorney only take effect when someone experiences medical issues that prevent them from acting on their own behalf. The documents can also lose their authority in many scenarios. When someone’s condition improves, their agent can give authority back to them. If someone becomes permanently incapacitated, certain powers of attorney may lose their authority. Some adults specifically draft durable powers of attorney to ensure that their documents continue to protect them if they become permanently incapacitated.
Powers of attorney grant total control to another person
Some people separate authority over financial matters and authority over medical matters into two distinct documents. That way, they limit the power one agent has over their life in an emergency. It is also possible to create very thorough, custom documents that only grant authority in certain circumstances. The documents can limit the agent’s access to only certain financial accounts or certain types of medical decisions. The principal drafting the documents can strategically restrict the authority that they transfer to an attorney-in-fact in the event of their incapacitation.
The sooner people create thorough and accurate powers of attorney, the less likely they are to find themselves without necessary support in the event of a difficult situation. Learning more about valuable estate planning documents can help adults create the paperwork they require given their circumstances. Powers of attorney are one of several useful tools that can protect people in the event of a medical emergency.