Power of Attorney
The importance of having a power of attorney cannot be emphasized enough and should never be undertaken lightly. Let’s discuss what Power of Attorney is, the different types, how they work, and how to create one that meets your needs.
What is a Power of Attorney?
A power of attorney or POA is a straightforward document that allows someone you trust to act in your place should you become incapacitated. The person you give this permission to is known as an “attorney-in-fact” or an “Agent”. For our purposes, we’re going to refer to that person as your “Agent” from here on to avoid confusing the role with that of a lawyer, as a law degree is unnecessary.
You can designate anyone you want: your spouse, adult child, sibling, friend, or any other trusted person of your choice to handle your financial or health care matters. Furthermore, you can limit your Agent’s authority by specifying it in your Power Of Attorney document. The use of a Power Of Attorney is limited to when you are alive. Decisions that must be made after your death are typically made by an executor. If you want to know more about executors and how to appoint one, read here.
Power of Attorney: The Five types
A variety of situations can be addressed by the power of attorney documents.
- Limited Power Of Attorney
Limited Power Of Attorney is a power of attorney document that is limited to a single event such as representing you in the purchase of a car when you cannot be there yourself or you need someone who better understands the ins and outs of buying a vehicle to step in.
- Durable Power Of Attorney
This document is considered to be enforced from the moment you sign it until you either pass away or revoke it. It allows the person of your choice to step into your shoes when you are no longer able to do so. They will make all the major decisions you would typically make yourself pertaining to your healthcare, housing, and handling of debts.
- Durable Power Of Attorney for Finances
This Power Of Attorney is specific to attending to the handling of financial matters after someone is no longer able to do it for themselves.
- Durable Power Of Attorney for Health Care
This document allows you to choose someone to oversee your healthcare needs. It has more than one name, including “healthcare proxy” and “advanced directive.”
- Springing Power Of Attorney
A springing Power Of Attorney is a power of attorney that only “springs” into action if you are formally declared incompetent, unable to make your own decisions, or unable to make financial decisions. Some people who are uneasy with relinquishing control opt for a springing durable financial Power Of Attorney that is effective only if they are ever declared incapacitated by a third party, such as a doctor. At first glance, this may seem like the best choice. However, a springing POA can pose logistical issues. It’s generally advised to use a durable financial POA, name a trusted Agent, and make it clear that it’s only for use in the case of incapacitation.
How Do I Choose an Agent?
Generally speaking, any competent adult can serve as your Agent.
With respect to a financial Agent, you don’t have to pick a financial expert, but it’s crucial to select someone who demonstrates good common sense and has your complete trust. In addition, consider these factors:
- If you’re married, we generally advise that you select your spouse as your Agent to minimize conflicts regarding shared property.
- Proximity If you have the option, choose someone who lives nearby, as tasks like property maintenance, mail handling, and bank visits are more straightforward in person.
- Multiple Agents Generally, we recommend only choosing a single Agent. Especially as many financial institutions will only work with one Agent to avoid debates and disagreements. (However, it IS wise to name an alternative Agent in case your first choice is unavailable for an extended period).
Prior to creating the power of attorney, have a conversation with the Agent you have selected. It is vital to ensure that your chosen Agent understands the responsibilities involved and is willing to take them on.
It can be tough for your loved ones to consider a time when you are unable to make decisions. But the importance of having a Power of Attorney will be readily apparent in the relief on their faces as they read through the document and see they aren’t going to have to make any decisions that you haven’t already condoned.
Your Power Of Attorney must be signed by both you and your Agent in the presence of a notary with two witnesses.
It’s worth noting that in Alaska, there are a few events that can cause the revocation of your Power Of Attorney. For example, if you named your spouse as your Agent in case of your death and you get a divorce, the Power Of Attorney is automatically canceled.
Have Questions about Creating Your POA? We’re here to help!
Now that you understand the importance of having a Power of Attorney and how to go about selecting an agent, contact The Law Office of Constance A. Aschenbrenner to talk to an experienced estate planning expert, or to schedule a free consultation.
Our founder, Constance A. Aschenbrenner, has worked in Alaska since 1996 in different legal roles, including private, corporate, and state practice. In addition, she served as an assistant public defender. She created the Law Office of Constance A. Aschenbrenner in July, 2008. Serving the people of Alaska is her passion, and she finds fulfillment in helping them succeed.
Tap into the wealth of knowledge from an experienced Alaska Estate Planning Attorney. Our mission at the Law Office of Constance A. Aschenbrenner is to empower Alaska residents, one client at a time.