Establishing A Power Of Attorney In Tennessee
Having an adequately planned estate does not only entail planning for death, it also entails and requires planning for events of incapacity—when someone is physically or mentally incapable or unable to do something. One of the best ways that one can plan ahead for events of incapacity is by executing powers of attorney.
What is a Power of Attorney?
A Power of Attorney is created when one person (referred to as the Principal) gives another person (referred to as the Agent) the ability to make decisions on their behalf in the event that the Principal is unable to make them.
What Types of Powers of Attorney exist?
Here at Batson Nolan PLC, we generally include two different kinds of Powers of Attorney in our Estate Planning package: a Financial Power of Attorney and a Power of Attorney for Health Care. However, there are also a couple of specific Powers of Attorney for special occasions.
Financial Power Of Attorney
A Financial Power of Attorney is a legal document that gives someone the ability to make financial decisions on your behalf, in the event that you are unable or incapable of making them. In this regard, “financial decisions” include any financial decisions that the Principal himself could make, such as writing checks, withdrawing cash, transferring real property, accessing safety deposit boxes, etc…
- Examples. A Financial Power Of Attorney can be used by….
- A son to pay his aging mother’s bills.
- A wife to buy property when her husband is deployed.
- A sibling to help with managing the finances for a sibling who has dementia.
Durable Power of Attorney
A durable power of attorney is when the agent can continue to act even if the principal incurs a disability or loses their decision-making capacity. In other words, the document remains effective until the principal revokes it or dies. With a durable power of attorney, the agent has a wide range of powers unless the principal specifically limits their authority to act. For example, an agent can do any of the following:
- Sign documents,
- Establish and access bank accounts,
- Buy and sell real property,
- File and pay taxes,
- Acquire life insurance policies, and
- Access the principal’s electronic communications.
With the power to make such impactful decisions for you, it’s important to choose an agent that you trust and someone who has your best interests at heart.
Power Of Attorney For Health Care
A Power of Attorney for Health Care is a legal document that gives someone the ability to make health care decisions on your behalf, in the event that you are unable or incapable of making them. In this regard, “health care decisions” include any health care decisions that the Principal herself could make, such as receiving medical records, authorizing medical procedures, authorizing the provision of medicines or medical treatment, etc. Examples. A Power of Attorney for Health Care can be used by….
- A daughter to access an ailing father’s medical records.
- A husband to authorize emergency surgery for his wife who is in a coma.
- A sibling to assisting another sibling in enrolling into a nursing home.
Limited Power Of Attorney For Minor Children
A Limited Power of Attorney for Minor Children is a type of Power of Attorney whereby parents will give an individual(s) the power to make health care decisions for their minor children if they are unable or incapable of making them.
We most often use this type of power of attorney when the parents of minor children are going on an extended trip, and they want the caregivers of their children to be able to make emergency health care decisions for them in the event that they are unable to be reached to make them. This power of attorney generally includes the same powers as the standard Power of Attorney for Health Care, but is limited in terms of duration.
Springing Power of Attorney
With a springing power of attorney, the agent’s powers only take effect when a certain event occurs. For example, the principal may instruct that the power of attorney kick in only when they become mentally incapacitated.
Why Would You Need a Power of Attorney?
Now that you know the basics, the next question is usually, Why do you need a power of attorney?
Control
Life is uncertain. If you were in a debilitating accident or became ill and lost your mental capacity, who would care for you? Who would ensure your children are provided for? Who would pay your bills, manage your investments, or instruct the doctors on how to treat you? Without a power of attorney, whether it’s a financial or medical one, you leave life-altering decisions up to someone that a court appoints. This document gives you a certain amount of control over unpredictable events by allowing you to select the person to care for you and your family.
Clear Intentions
With a power of attorney, you make your wishes clear. Your family and loved ones don’t have to guess what you would have wanted or argue over what’s best for you. Your agent has the authority to make decisions in accordance with your intentions and desires.
Convenience
Remember, powers of attorney can be created for limited situations. For instance, if you travel internationally for an extended period of time, you may want to appoint an agent to monitor your affairs.
Peace of Mind
A comprehensive durable power of attorney that gives the agent broad powers can offer you peace of mind. For example, if you become incapacitated, your agent could maintain your household’s expenses and make monetary gifts to family members. A power of attorney ensures that your personal affairs are attended to when you can no longer manage them on your own.
When Do You Need a Power of Attorney?
If you want to permit someone to act on your behalf, then you need a power of attorney. Since life can change in an instant, there’s no “right time” to execute a power of attorney. If you’re 18 or older and have assets, a family, or just want to designate a person to handle your affairs if you’re unable to—then now is when you need a power of attorney.
What Are The Consequences of Failing To Execute a Power of Attorney?
When you execute a Power of Attorney, you are designating who you want to be in charge of making your financial or health care decisions, and who you trust to do what is in your best interest. When you fail to execute these documents in advance, a court will appoint someone—someone you might not trust to manage your finances or make your health care decisions—to serve as a Conservator over you. Essentially, it is up to a judge, who does not know you or your family members personally, to decide who is best qualified to make these decisions for you.
If you do not currently have Powers of Attorney executed, do not wait until it is too late. Contact Batson Nolan and set up an appointment with our Estate Planning team, so that you can ensure your estate is adequately planned to provide for events of incapacity.
Our experienced legal team in Clarksville and Springfield, Tennessee, also handles other types of estate planning cases, including:
Call 931-650-5484 to plan your estate today!