Clients often ask me “Why do I need a power of attorney …. I am not sick, and I don’t want anyone to have that kind of control over me or my finances.”
A “Power of Attorney” (or POA) is a document in which you appoint a specific person the authority to act on your behalf for a specific purpose – normally either to make health care decisions or for finances and property. These specific POAs are called a “Health Care POA” or a “General POA” (or “Financial POA”).
A common misconception is that spouses can sign documents or make legal decisions for one another. That is not correct. However, a valid POA allows spouses to care for one another when they are incapacitated and to handle each other’s property (even individually titled property) when their loved one is sick or unavailable (traveling, of the country, etc.).
Older people often also name their adult children as POAs, so their children will be able to handle both medical and financial issues for their parent as they age.
POAs are not expensive or burdensome to complete. However, if they are not in place, the result could be very bad. I have helped several families in which an older single or widowed parent became incapacitated (through a stroke, medical emergency, growing dementia, etc.) and legally unable to sign a POA. Their children or loved ones have no ability to make medical decisions or use their parent’s own money to pay for his or her care.
The only option in that case under Tennessee law is a Conservatorship – an expensive and burdensome process which is overseen by a Court.
Instead of spending a few hundred dollars to have legally binding POAs drafted and signed, I have seen families tens of thousands of dollars in legal fees on a Conservatorship, simply to get access to a loved one’s assets to use for their own care.
Of course, one needs to appoint only someone they could absolutely trust for their POA. Yet if that trust is warranted, then a valid POA could be a very effective tool to assist your loved one as we all face the uncertainties of life.
If you would like to discuss POAs, wills, or estate planning, please contact Rich Scrugham at 865-546-9321.