Do I need a power of attorney?


Do I need a power of attorney?

By RANDY RATLIFF

People often ask me if they need a power of attorney. I always reply, “Are you over 18? If you are, then – yes.”  By putting a comprehensive power attorney in place, you can protect your interests, you can pick who will be your advocate, and you can save your family the trouble of having to go to court to appoint a conservator in the event you cannot manage your own affairs.

In other words, you save time, money, and headache.

What exactly is a “power of attorney?” A power of attorney (POA) simply allows an individual to act as an “agent” for another person, called the “principal.” The principal is the person who appoints the agent to represent him or her in all legal matters, financial matters, or health matters. Typically, in my practice, I draft a healthcare POA that is separate from the legal/financial POA, although they can be combined.

Additionally, a power of attorney can be general (grants full authority over everything), durable (no specific time for it to end), or it can be limited (both as to how long it is effective and the powers it grants).  Each state has a statute that sets out basic parameters for powers of attorney. However, a power of attorney can be tailored to each principal’s preferences. For example, a few years ago, my wife and I sold some real estate in another state. We never met the buyers. Instead, we granted an agent the necessary powers to handle the sale and collect our check while we enjoyed taking our daughter to Disney World.

So, a POA can useful in a number of circumstances, but it is vital when we no longer have the ability to manage our affairs. All too often, after someone becomes incapacitated, his or her family members cannot decide among themselves who will have authority to handle things. Spouses or children are usually the natural choices, but their authority to act is not automatic. Some people may prefer friends or siblings to serve as their power of attorney because they have a natural business acumen or a healthcare background. In picking an agent, reliability and trustworthiness are key considerations.

When the family members cannot agree and there is no POA, it can get very messy. At a minimum, there will be hard feelings. At the extreme, there will be a long costly legal battle for control. A sad example is that of “America’s Top 40” host Casey Kasem. His daughter, Kerri, had to battle with his wife, Jean, in the Los Angeles Probate Court to establish a conservatorship for Kasem. Kerri was named as temporary conservator after Jean Kasem removed him from a Santa Monica nursing home to a facility in Washington without informing his children of their father’s whereabouts. On June 11, 2014, after a prolonged battle between his wife and children, Kasem’s nutrition and hydration was stopped by the judge overseeing the conservatorship. This family battle could have been avoided with proper planning and a clear communication of his wishes by Mr. Kasem to his wife and children.

So, should you have a POA?  Having a POA –

  • Provides the ability to choose who will make decisions for you.
  • Avoids the necessity of a court-appointed conservatorship.
  • Provides family members an opportunity to discuss wishes and desires.
  • Prevents questions about principal’s intent.
  • Prevents delays in asset protection planning.
  • Protects the agent from claims of financial abuse.
  • Allows agents to talk to other agencies or third parties, such as a bank.
  • Allows an agent to plan and apply for public or veterans’ benefits.
  • Provides peace of mind for everyone involved.

Keep in mind, not all POAs are the same. Online forms or generic documents may be too strong or too weak or, believe it or not, both. It’s always a good idea to discuss important legal matters with a qualified attorney.

Randy Ratliff is a Brentwood attorney practicing estate and elder law. He can be reached at trust@RandyRatliff.com or www.randyratliff.com

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