A power of attorney can be one of the most, if not the most important document for a family to have in the event of illness. With it, you can give someone you trust the ability to make decisions pertaining to your health and finances. Without it, if at some point you become either totally or partially unable to make such decisions, the terribly unpleasant and expensive alternative is to have a guardian appointed.

A power of attorney gives someone else the authority do things on your behalf. You can give this person either broad powers to do everything for you or limited powers to do something specific or anything in between. By giving a person broad powers, you literally give this individual the authority to do everything for you that you could normally do for yourself. This means that he can make your financial decisions, spend your money -for you-, enter into contracts, sell your assets, make gifts, chose a doctor, hospital or nursing home and authorize care and make any other decision that you could, on your behalf.

An example of a limited power of attorney is that you may give a person authority to sign your name only to the documents necessary to sell a house, if you cannot be available for a closing. Another example of a limited power of attorney would be to give a person solely the authority to sign checks on your behalf.

All of these decisions must be made for your benefit in his fiduciary capacity. This means that everything he does must be for your best interests-not his. He will be held to a high standard of care. A fiduciary owes you a duty of loyalty.

Requirements

A power of attorney must be given in writing and shall be signed and dated. It is generally not necessary that the power of attorney be notarized or witnessed. However, in the event a person cannot sign his own power-of-attorney, another may do so at his request. In that event, it is necessary for that to occur in the presence of two witnesses.

Be Careful Choosing an Agent

By giving someone a broad power of attorney, you are enabling that person to have a lot of authority over your life. He may purchase or sell things on your behalf and he is usually given access to all bank accounts and other financial institutions. Therefore, much thought should be given to who holds this power. If this person is heavily in debt or has a problem with drugs or anything else which requires more money than he may have, this may not be the best choice of person to give access to your money.

Potential Abuse

Abuse of the power of attorney has been so prevalent that you may be required to sign a document giving you notice of all of the potential ramifications of your decision. Additionally, the recipient of this authority may also be required to sign an acknowledgment of how serious an abuse of this power can be.


Creation

A power of attorney may come into existence in one of two ways: It may become immediately effective as soon as it is signed or, it may be a "springing power of attorney". A spending power of attorney does not become effective until the person is incapacitated. For legal purposes, a person is incapacitated when he is no longer able to utilize information to make proper decisions or his ability to communicate these decisions is diminished or lost. He is incapacitated if as a result of his diminished or lost capacity, he is either partially or totally unable to make decisions pertaining to his physical health or financial needs.

If you know you are dying, your chances of the needing a power of attorney are greatly enhanced. You would be doing your family or friends a great injustice by not having such a document. This will allow a person that you know and trust to be able to make decisions and help you when you are no longer able to help yourself. If you are unable to makes decisions on your own behalf, simply entering or being treated at a hospital or nursing home will become difficult and complex. Should this occur, the hospital or nursing home will require the appointment of a guardian. Suddenly, what could have been accomplished with a single inexpensive document will result in the expense and trauma caused by the need to hire lawyers and doctors and go to court.

About the Author:
Henry Sauter is a graduate of the Temple School of Law who focuses his practice in the areas of Estate Planning, Probate Administration and Elder Law. Before law school, Henry was a legislative aide and then Deputy Chief-of-Staff for a New York State Assemblywoman during the 2005 and 2006 legislative sessions. He managed her legislative office in Albany and worked on many aging and health issues.

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