News

Powers Of Attorney: If You Need Them And Don’t Have Them, It’s Too Late

Author: Date: 04/06/2021

Categories: Estate Planning and Administration, Partnership Planning

A man is signing a power of attorney, focus is on the tip of the pen. “Larry, my Mom had a stroke a few days ago. She’s in a care facility now and isn’t able to make decisions. The doctors and administrators are asking me to sign papers and make decisions for her. What do I do?”

I receive calls like that frequently, and my immediate response is always: “Let’s look at her powers of attorney and get things moving.” (Your parents or your uncle or the elderly friend who relies on you do have powers of attorney, don’t they?)

As you probably know, a power of attorney is a document that is created while you are well that allows other people to make decisions for you if there comes a time when you are unwell and cannot make your own decisions. There are two types: a medical power of attorney, and a financial power of attorney. In the best-case scenario, the documents exist, we can lay our hands on them, and see to it that the designated decision-maker can confidently and legally take on the role.

If you have – or are likely to have – responsibility for the care of a parent or any other loved one, it’s extremely important for you to be sure that they have powers of attorney in place before any need arises. Without them, a difficult time gets much tougher.

Yes, spouses have an automatic right to make medical decisions for one another. But if the incapacitated person is a relative other than your spouse, state law will determine who has the power to make medical decisions, even if that person is estranged or lives far away.

Even bigger challenges apply to the hundreds of other decisions that have nothing to do with medical care. Who will pay the bills, manage the money, or take care of the home? That’s where a financial power of attorney comes in. This document grants important, broad rights to trusted people to manage assets. That’s incredibly important because no one gets the right to access a person’s personal assets automatically, even a spouse. If there’s a joint checking account, one spouse is still going to be able to write a check even if the other is incapacitated, but that’s the extent of it. What if there’s a need to withdraw money from a retirement account to pay the mortgage? Too bad, because without a power of attorney, even your spouse will be out of luck. If it becomes necessary to sell a home or other real estate, no one – not even a spouse – can agree to a sale or sign off on a deed without having been legally assigned the right to do that by the person who’s incapacitated.

The messy workaround for not having a financial power of attorney is that someone has to go into court and file a guardianship petition just to get the powers that could have been assigned in a simple document. That’s a very expensive and time-consuming alternative in most jurisdictions and one that should be totally unnecessary. I’ll say it again. Please find a way to ask if your loved ones have signed powers of attorney. Determine if you can how recent they are; POA documents don’t always age gracefully and documents more than 10 years old may not be acceptable to some financial institutions.

And while you’re at it, please be sure that you have powers of attorney in place. If you do, take a fresh look to be sure that the people you originally selected to act on your behalf are the ones you would choose today!

Lawrence (Larry) Jacobs has helped more than 1000 couples and single people in the Washington area protect their assets and loved ones through careful estate planning. He is also a recognized authority on the rights of same-sex couples and a noted business lawyer. Larry is a partner at McMillan Metro, P.C., and has practiced law for 46 years. He is admitted to the bar in Maryland, Virginia, and the District of Columbia. This column is not intended to provide legal advice, but only general guidance that may or may not be applicable to your specific situation.