Elder law and estate planning: what is ‘power of attorney’?

by | May 17, 2018 | Firm News |

People in East Hanover may have heard of the phrase power of attorney, but may not know exactly what this term means. A power of attorney is a legal document a person executes that dictates who will be able to make legal decisions on behalf of the person should the person become incapacitated. The person executing the power of attorney is the principal, and the person chosen as power of attorney is the agent. The two main types of power of attorney are a health care power of attorney and a financial power of attorney. The person executing the power of attorney will determine what their agent will and will not be able to do.

Executing a power of attorney is relatively straightforward. To execute a power of attorney, the principal must be age 18 or above, willing to give power of attorney to the agent and the principal has to be of sound mind — that is, they understand the terms of the power of attorney they are signing and what powers the agent will have.

A person can even choose more than one person to serve as agent in a power of attorney. This could be especially helpful if, when the time comes, one of the agents is unable to fulfill their duties. Should a person choose to do this, in the power of attorney they should lay out how the co-agents will work together to make decisions and what dispute resolution processes will be used should the co-agents disagree on an issue.

A power of attorney intersects both elder law issues and estate planning issues. Those in East Hanover who have not yet considered estate planning may want to do so. In addition to power of attorney, a person may want a will, trust and health care directive. With these documents in place, one can ensure that their end-of-life wishes will be met, which could be of comfort to both them and their loved ones.

Source: Consumer Affairs, “Your power of attorney,” David Chandler, Ph.D., Oct. 30, 2017