3 Potential Benefits of Including POA Forms in Your Estate Plans

Many people associate estate planning with making a will, but the process can go much further than deciding how your assets should be divided among heirs when you’re gone. In fact, many estate planning decisions are relevant during your own lifetime.

When you work with a comprehensive estate planning attorney, for example, you might make decisions and set up resources that help with retirement and tax planning. Another potentially valuable estate planning tool is power of attorney.

What Is Power of Attorney?

A power of attorney, or POA, form is a legal document that provides someone with the authority to make decisions or take actions on your behalf. The person you name in the POA form is known as the attorney-in-fact or agent, but they don’t have to be an actual lawyer.

The goal of POA forms is typically to appoint someone you trust to handle your affairs or make decisions on your behalf. You want them to act in a situation as if they were you, protecting your interests and making decisions that you would likely make yourself.

What Are Some Common Types of POA?

You can create various types of POA forms, and an estate planning attorney can help you understand what might be relevant and helpful for you. Common POA types include:

• Healthcare POA. A healthcare POA, sometimes also called a medical power of attorney, healthcare advance directive, or durable power of attorney for healthcare, allows the person you name to discuss your healthcare with providers and make decisions on your behalf if you are incapacitated and unable to do so yourself.
• Financial POA. A financial POA allows the person you appoint to handle your financial affairs. This might include accessing and managing your accounts and investments, selling and buying things on your behalf, and paying your bills.
• General POA. A general POA provides your agent with the legal ability to handle a wide range of affairs on your behalf.
• Limited POA. You can also create a very limited POA, such as one that only allows someone to sign a contract in your proxy or oversee a single transaction because you can’t be there to do it.

What Does Durable Mean Related to POA Forms?

A durable power of attorney is one that is still in effect if you are incapacitated. Healthcare POAs need to be durable, for example, so that they are in effect if you are in a coma or otherwise incapacitated.

Benefits of Adding POA Forms to Your Estate Plans

To understand the implications of not including POA forms in your estate planning, start by considering the benefits. If you don’t include power of attorney choices, you lose out on some of these benefits and may end up facing related negative consequences.

You Might Avoid Court-Ordered Conservatorship or Guardianships

Think about what might happen if you are incapacitated without any POA form or plan for handling your affairs in such a situation. Loved ones might want to step in to help, but they don’t have the legal authority to access and manage your finances. Depending on the situation and laws of your state, even their input into your medical care may be limited.

In such a case, loved ones or others may have to turn to the courts for relief. This can result in a court-ordered conservatorship or guardianship if you are not able to handle your affairs for yourself. The downside of this path is that you have no control over who is appointed and how these decisions might be made.

In contrast, if you had POA forms, you already named people you trust and want to take on these roles.

You Have Better Control Over Medical Decisions

A medical POA form lets you state your wishes about end-of-life care and other matters. You can also name someone as your agent who you trust to understand your wishes and stand up for them if you are incapacitated.

Without a medical POA form, medical teams may rely on your next-of-kin to make such decisions. This can put an unnecessary burden on your loved one, who may be dealing with big emotions and stress if you have been injured or are ill. And if medical teams can’t get in touch with your family and there is no POA, they may have to abide by hospital standard operating procedures, which may not result in outcomes you personally want.

You Can Safeguard Your Financial Security

Naming someone as your financial POA can help safeguard your financial situation if you’re ever incapacitated. Imagine an unfortunate scenario where you are injured in a car accident and in a medically induced coma for a week or two. Without a financial POA, your bills and accounts may be left unattended during that time. At minimum, this can lead to inconveniences and expenses such as late fees.

How Can You Add POA Forms to Your Estate Planning?

To add POA forms to your estate planning, talk to an estate planning legal team. They can help you understand what POA forms might be beneficial for you and how to integrate them seamlessly with wills, trusts, and other estate planning resources.

To get started with power of attorney forms in New Jersey, call the Bratton Estate & Elder Care Attorneys at 856-770-2744.