Power of Attorney
Your power of attorney is a common, but under-used estate planning tool. It allows you to identify a list of people who will handle your affairs if you became incapacitated/incompetent. Your power of attorney is part of your minimum estate plan (along with your will, and healthcare directives). Unless you have prepared a properly-written power of attorney, your family will likely face an expensive and difficult court proceeding if you became very sick.
Contact our Oklahoma City estate planning lawyers to draft your power of attorney today.
Incapacity & Incompetency
Your family will often face very serious problems if you were physically injured (incapacitated) or began suffering a mental/emotional disability (incompetence). Sadly, the problems resulting from incapacity or incompetency are sometimes worse than those that would arise if that person died.
This is because if you were to die, your family can often settle your estate relatively fast. But, if you became incapacitated/incompetent, the problems persist for as long as you are sick. A long-term illness could result in problems that last for years.
What kind of problems? Well, your family, even your spouse, in most cases, cannot automatically take care of your financial affairs, or make certain medical decisions on your behalf. Many people wrongly assume that family members have authorities and powers that the law doesn’t actually provide.
As discussed above, your spouse cannot sell/refinance your interest in your home (or any real estate) during your illness, even if the title is held in both of your names. This problem also occurs regarding any other items solely in your name, such as stocks and other investments, retirement plans, life insurance, and many others.
What is a Power of Attorney
The power of attorney (“PoA”) allows you to give authority to handle your affairs to someone you trust if you ever got very sick. The person to whom you give this power has a misleading name: “attorney-in-fact”. This name suggests that the person is a lawyer, which is usually not the case. In general, an “attorney” is someone appointed to act for another in business or legal matters.
In the PoA the attorney-in-fact need not be (and usually isn’t) an “attorney-at-law” (a lawyer). Instead, the attorney-in-fact (the “AiF”) takes care of certain tasks for another person (called the “principal”).
The principal makes the PoA and gives the AiF power to act on behalf of the principal. The AiF acts as sort of a stand-in for the Principal.
Here are a few important points to remember:
- The AiF only has the specific powers provided in the Power of Attorney document.
- PoAs must be carefully written to comply with Oklahoma law.
- Powers of attorney stop working if the principal becomes incapacitated/incompetent unless it includes a special language.
- All powers of attorney terminate when the principal dies.
There are many types of PoAs. Some are short-lived, others are intended to last a lifetime. Some deal only with business matters (paying bills, filing tax returns, etc.), others deal with personal matters (medical decisions, see below).
In the world of estate planning, PoAs are absolutely crucial for meeting your needs. Sadly, many family members find out too late that their loved one tried to make a PoA, but did so incorrectly. Forms sold in kits or found on the internet are often painfully inadequate.
Avoid risking your family’s well-being – expend a little additional time and money and have this important estate planning tool prepared by one of our Oklahoma City estate planning lawyers today.
Reach out to us to schedule a free initial consultation today.