There are two general types of powers of attorney [POA]: financial and medical. Both appoint another individual, called an agent, to stand in your shoes and act for you.
In financial POAs, your agent can act for you in financial and business matters. POA agents can do whatever you can do: withdraw money from you accounts, pay your bills, sell your real estate, file your tax returns. Every POA is slightly different and we recommend having an attorney prepare them; particular powers should be expressly granted. For example, some POAs allow agents to give gifts, even to themselves. Others may allow an agent to change retirement fund beneficiaries. These can be important powers to grant expressly for estate planning purposes, especially if you suddently become incapacitated. We can recommend which powers and provisions to include, depending on your particular situation.
Without a POA, someone who becomes incapacitated would need to have a guardian or conservator appointed to act for them in financial and business matters. The appointment of a conservator or guardian is a court process that can be costly and time consuming. The proposed guardian/conservator must provide notice of the proceedings to all interested parties, submit a detailed plan to the court, and submit a finding of incapacity by a physician. There ia a hearing at which the judge must determine whether conservatorship/guardianship is necessary and who should be the guardian/conservator. In most cases, a financial POA prevents this process and instead allows an agent to act immediately.
A medical POA appoints an agent to make personal and health care decisions for you if you should become incapacitated. (A physician is responsible under the law to obtain your consent if you are able to provide it.) A medical POA allows an agent to give or withhold consent to medical treatment, to make decisions about where you receive care, to authorize relief from pain (including unconventional therapies and drugs), to grant releases for medical procedures, and to gain access to your private medical records. We also recommend including language in medical POAs about your preferences in regards to organ donation, pallative care, and any preference to remain at home instead of going to a hospital at the end of life.
Without a medical POA, a loved one would need to turn to the court system, as detailed above, to seek appointment as a conservator of guardian. In emergency situations where you are incapacitated, familymembers would need to agree on treatment decisions, which can be a precarious situation for you, your family, and your health care provider.
POAs generally provide peace of mind and allow you to appoint an agent rather than relying on the court or fate to make these decisions. You then can discuss your goals, values and preferences with these agents, both ensuring that your wishes will be followed and protecting loved ones from having to make difficult financial and medical decisions on your behalf without clear guidance and authority.