Powers of Attorney are different than a Last Will and Testament because a Power of Attorney allows a third person to handle your finances or health care while you are still alive. A Last Will and Testament, on the other hand, designates an Executor only after you pass away. In some ways, a Power of Attorney is much more important because you are potentially authorizing a person to take your property from you while you are still alive. An Executor can only do that after you die and, really, you will not really care at that point. Am I right?
It goes without saying that choosing the right person to act as your agent is extremely important. Assuming you have complete trust in the person who is handling your affairs pursuant to your Power of Attorney, it is important to understand the “effectiveness” clause. This is the paragraph of your Power of Attorney that controls when your Agent has the authority to act on your behalf. One choice is to have a Power of Attorney that is effective immediately, i.e., as soon as you sign it. The other choice is called “springing.” This means the Power of Attorney is only effective when your are incapacitated. Typically, the Power of Attorney document will require that the Agent obtain letters from two or more physicians certifying that you are incapacitated.
The disadvantage to a springing power is obvious. What a pain for the Agent to prove that you are incapacitated if there is an emergency. I can not tell you how many clients I have had who call the office after a loved one has been admitted to the hospital or a skilled nursing facility after a stroke or other medical event. They call my office because banks, insurance companies and other financial institutions will not allow them access to any information because the Power of Attorney is not effective. Why? Because there is no written proof that you are incapacitated. A so called “springing” power of attorney requires your agent to wait until your attending physician’s office is open and obtain a letter from him or her which will be forthcoming just as soon as the doctor gets around it it. Stressful. Expensive. Unnecessary.
You should sign a Power of Attorney that is effective immediately if you have family members you love and trust at any age. If you have any health problems, you should sign a Power of Attorney that is effective immediately. If you are over the age of seventy, you should sign a Power of Attorney that is effective immediately. Springing Powers of Attorney are best left for younger people who are unmarried or uncertain about whom they can trust completely. Of course, situations varies and you should consult with a qualified elder law attorney to discuss the option that best fits your needs.