Aging is a normal part of life that comes with the gradual— sometimes rapid—decline in physical and mental capabilities. As abilities to take care of everyday things diminish, people need help with personal finances, business, health care, and other important things. It’s best to think about the person you want to make these life decisions for you when the time comes.
When you choose that person, you need to formalize an agreement to ensure the individual has the right to make decisions for you. This formal legal document is referred to as a Power of Attorney (POA). Below we offer an overview of powers of attorneys, different types of POAs, and the reasons why designating someone as your power of attorney is so important.
What Is a Power of Attorney?
A Power of Attorney is a written legal authorization that approves another person to act on your behalf in the event that you become mentally or physically incapacitated. The idea behind designating someone to act on your behalf is to have someone that you trust will represent your best interests and follow through with your wishes when making crucial decisions related to your life.
On the legal document, you are named as principal, and your trusted representative is named as your agent or attorney-in-fact. Many people choose a spouse or an adult child to give their POA. However, other family members and close friends also hold POAs in some cases. Once you grant someone your POA, the law expects them to make informed decisions in your best interest about crucial issues including:
- Healthcare
- Business transactions
- Federal and state tax returns
- Other legal or financial planning
Selecting someone as your attorney-in-fact is often part of the estate planning process. However, even those who do not need to worry about designating large amounts of wealth or property to future generations still should create a power of attorney.
Types of Power of Attorney Documents
You can grant power of attorney for various events and circumstances. Each of these variations results in a different type of power of attorney. Your POA document might include various powers or specific responsibilities. Our legal team can review your situation and determine the documents you need going forward. It’s your decision to decide what powers you want to grant another, so they can act on your behalf.
Limited/Special Power of Attorney
If you lose your physical and/or mental capacities, you might want someone you trust to take care of one or more issues or particular responsibilities. Examples include:
- Designating someone to sell your home or other personal property
- Designating someone to monitor and distribute the contents of a safe deposit box
- Designating someone, often a spouse or partner, to make medical decisions on your behalf
- Designating someone to make decisions related to your business
Full Power of Attorney
In situations where you want to provide a trusted individual with a broad range of powers to make important decisions on your behalf, you need to grant him or her full power of attorney. A full POA typically includes personal and business financial transactions, decisions related to healthcare and treatment, and much more. These general full power of attorneys are typically part of an estate plan.
Durability in Louisiana Power of Attorney Documents
Sometimes people avoid granting power of attorney to another person because they are worried they will permanently give up the right to make decisions about their own lives. A durable power of attorney provides the solution to this concern. It is a traditional full power of attorney, but it only goes into effect when you become incapacitated, making durable POAs a popular choice for many.
Everyone Needs a Power of Attorney
Creating power of attorney documents is often associated with aging, but it doesn’t mean you need to wait until you retire to create one. In fact, it’s best to create one early in life and make changes as necessary. A power of attorney is important for several reasons, including:
Avoid Costly and Emotional Court Process
In the event you need someone to make decisions on your behalf, your family members, business partners, or other relevant parties will need to go through a court proceeding to let a Louisiana judge decide who should make decisions for you. If competing family or business interests exist, this kind of proceeding can lead to major disagreements in some situations.
Protect Your Assets
People work their entire life to acquire assets including their homes and retirement savings. Some even build businesses. You risk losing everything you have worked so hard to build if you do not choose someone to handle your affairs. Whoever the court chooses to make decisions for you might not have your best interests in mind. Choosing your own attorney-in-fact makes it far more likely that the person acting on your behalf will honor your requests and wishes.
Make Healthcare Decisions While You Are in Good Health
It can be scary to think about what you want to do if you get in an accident or have some other medical emergency that makes it impossible for you to make decisions about medical treatment and health care. The same is true about suffering from dementia, Alzheimer’s disease, or another condition related to aging. When you create a POA, you can provide guidance to your trusted agent about whether you will live in a nursing home or receive private care. You can also provide guidance on the types of treatment you wish to receive in the event of an accident or disease.
Get the Legal Help You Need to Draft Your Power of Attorney
As you make plans for your future and choose the person or people you trust to make decisions about your personal assets, obligations, and affairs, an experienced attorney can help prepare the right document(s) for your situation. Contact the skilled legal team at Stephenson, Chavarri & Dawson, L.L.C., online or at 504-523-6496 for estate planning and preparing the proper documents to ensure those you trust can act on your behalf.
