When you think of estate planning, many people jump directly to a will. While a will can be an important part of your estate plan, you should also consider implementing a power of attorney and adding it to your plan. Many people may not be familiar with powers of attorney, but they can be an essential part of any estate plan. A power of attorney is a document that allows another person to make a decision on your behalf if you are unable to do so yourself. There are various types of powers of attorney that you could enact depending on your situation and your needs. If you are thinking of adding a power of attorney to your estate plan, hiring a knowledgeable estate planning lawyer is your best option for creating a valid and enforceable power of attorney.

What Is a Power of Attorney?

In basic terms, a power of attorney is a document that gives another person the power to make certain decisions for you if you are unable to do so yourself. The person you give these powers to, usually referred to as your “agent” or “attorney-in-fact,” is a person of your choosing. In many cases, a person may designate their spouse or child to be their power of attorney. You can also customize your power of attorney to include (or exclude) certain decision-making powers.

The extent of a Power of Attorney

If you create a power of attorney and do not specify which decisions they cannot make, your agent is usually able to make most decisions if you are rendered incapable of making those decisions yourself. Your agent will also be the decision-maker about the rest of your estate if you pass away if you include a durable clause in the document that allows your power of attorney to continue after death.

Even though we often complain about it and dread the aesthetic and physical effects, aging is simply a part of life. Though we should not worry too much about our hair turning gray or falling out, it is not a bad idea to make arrangements that would help in the event you are no longer able to make decisions for yourself. There are various options available to you to do this, but two of the most commonly used options are powers of attorney and guardianships. Both options are similar to one another, but they also have various differences. Understanding these differences is important in making the best decision for you and your family.

Powers of Attorney

A power of attorney (POA) is a legal document that gives another person the authority to make certain decisions in the event you are unable to do so yourself. The person appointed to make those decisions called the “agent,” must do so according to the terms of the document. When the document is created, the person must be able to legally give their consent to relinquish decision-making power if they become incapacitated.

POA’s are customizable documents in the sense that they allow the person for whom they are for to include or remove any powers they wish their agent to have. A POA can include provisions for both personal and financial decisions and can include terms on what the agent should and should not do.

When drafting an estate plan, guarantors are often asked whether they have selected a power of attorney to represent them during a period of incapacitation. Do you really need such a person and how do you decide which person to name in your will or trust? More importantly, how can you ensure that the person you select is able to effectively represent your interests? Learn the answers to these questions in the following sections, and to discover how the assistance of a seasoned wills and trusts lawyer can protect the best interests of you, your heirs, and your estate. 

Why Assign a Power of Attorney? 

Although it can be unnerving to legally name and assign someone to handle your financial and healthcare decisions during a period of incapacitation, doing so can benefit you, your family, and your estate. First, it can ensure that you are not given medical treatments that you do not wish to receive. You are also less likely to experience the financial consequences that tend to occur when one’s finances go unmanaged (i.e. late fees, extreme loss in the stock market, unpaid bills, etc.), which can ensure your estate remains preserved for your heirs, should you eventually pass away. 

A healthcare power of attorney is a legal document that allows an individual (the "Principal") to give another person (the "Agent") the authority to act on his or her behalf as far as decisions regarding healthcare. Under the Illinois Power of Attorney Act, this document can limit the authority of the Agent, specify when the Agent's authority begins and ends, detail the duties that the Agent's authority covers, and set forth any limitations on the Agent's authority.

One common provision of a healthcare power of attorney, for instance, deals with decisions about whether to give or withdraw life-sustaining treatment. If a Principal has certain religious beliefs that prohibit or discourage certain types of medical treatment, a healthcare power of attorney can leave various instructions for the Agent regarding those types of treatment should the situation arise.

The important thing to remember is that you will continue to make your own healthcare decisions until you are no longer able or legally competent to do so. It is only when you become so ill that you cannot make those decisions for yourself that a healthcare power of attorney typically becomes operative.