If you’re in your 20s and 30s, it’s likely that you do not have a Power of Attorney (POA), or even know what one does. Very simply, the POA document allows you to appoint someone to make major decisions for you, either in terms of your healthcare, or your finances. Given that definition, you could be forgiven for thinking it’s a document designed solely for the elderly.
Is this really necessary for me?
Many of you may assume that if anything unfortunate happens to you, that your family will automatically have the right to make decisions for you. However, that’s not the case. When POA is absent, the courts dictate what happens to the person’s property and who is allowed to make decisions for them. You may not trust some of the people in your life to make scrambled eggs, much less dictate what happens to your wealth and health.
We’re all aware that unexpected accidents happen all the time, some serious enough to leave a person incapable of making their own decisions. That’s why POA documents are so important to have, regardless your of age. They outline what the individual wants to happen and who they want to take control in the event of such a situation.
What are the two types of POA?
Together, these two document cover everything that needs to be addressed in the event that you are incapacitated. They are rarely combined into a single document because they should be highly detailed and specific to either wealth or health.
- Power of Attorney for Property – details what an individual wants to happen to his or her finances and property.
- Power of Attorney for Personal Care – specifies what the person wants in relation to shelter, medical treatment, and other matters concerning their personal care.
There are 5 major reasons you should consider creating both Power of Attorney documents.
1. Your religion, culture, and values will be respected
A POA for Personal Care informs the guardian about an individual’s culture, religion, and personal values and explains how those factors should be taken into consideration. For example, a person who adopts a certain diet because of religious beliefs may want that to continue when he can’t make that decision for himself. Personal values may also determine what products are to be used, such as in the case of a vegan who wants to avoid products that come from animals.
2. You won’t be locked out of your spouse’s bank account
When a person becomes mentally incapable, not all banks will allow his or her spouse to access a personal bank account without a POA document stating that it’s acceptable. Simply being married is often not enough. Most cases will require documentation proving that the spouse is the individual’s legal guardian. If a POA for Property does not exist, this means the matter will likely have to go to court, and it could take a long time to straighten out.
3. Your pet tarantula will find a loving home
Many people forget to consider what would happen to their pet if they can no longer make decisions about their safety. Where would the animal live, and who would be responsible for buying pet food, toys, and veterinary care? Appropriately, a POA can contain what’s called a “cat lady” clause. This section of the document would give instructions about circumstances related to the pet’s care and even direct that money be given to the new owners.
4. You’ll save your family from relationship-destroying arguments
What many don’t realize is that if there is no POA, the individual’s family may have to take the matter to court before anyone is legally recognized as the guardian. Not only is this time-consuming, but it’s also very expensive. Arguments can go on for weeks about who is to take care of the person. Compared to the relatively short amount of time that goes into drafting up a POA, it’s well worth considering having one ready just in case. However, drafting a POA can also cause acrimony, so we have a piece here on how you can resolve those issues.
5. You’ll keep control over your finances
Even when a person becomes mentally unable to control finances in the moment, a POA can outline what is to be done with that money and property after the fact. It can be very specific by limiting the guardian to using the money to pay for necessary expenses like bills and groceries while disallowing control over a home or business.
Should you pursue creating a POA document, you should be aware that there are common problems with them that you should seek to mitigate. While it may seem early to think about planning for the unthinkable, it’s also not difficult to imagine the negative consequences of failing to plan.