What is a Power of Attorney and Why Do You Need One?
When planning for the future, most people think about wills and trusts. But one of the most important documents in any estate plan is often overlooked: the Power of Attorney (POA).
A Power of Attorney gives someone you trust the legal authority to act on your behalf in financial, legal, or health-related matters. It is not just for the elderly or infirm—every adult should consider having one in place.
Here’s what you need to know about what a Power of Attorney is, what it does, and why it matters.
What Is a Power of Attorney?
A Power of Attorney is a legal document that allows you (the “principal”) to appoint another person (the “agent” or “attorney-in-fact”) to make decisions and take actions on your behalf.
There are several types of POAs, each serving different purposes:
Durable Power of Attorney: Remains in effect even if you become mentally incapacitated. This is the most common and widely recommended form.
General Power of Attorney: Grants broad powers, such as managing bank accounts, signing documents, and handling real estate.
Limited (or Special) Power of Attorney: Grants authority for a specific task or for a limited period (e.g., selling a home while you're abroad).
Springing Power of Attorney: Becomes effective only if and when a specific event occurs, such as the onset of incapacity.
Medical Power of Attorney: Also known as a Health Care Surrogate Designation in Kentucky, this allows your agent to make medical decisions if you are unable to do so.
Why Is a Power of Attorney So Important?
1. Protects You in Case of Incapacity
Illness, injury, or a sudden medical emergency could leave you unable to make decisions for yourself. Without a POA, your loved ones may be forced to go to court to obtain a guardianship or conservatorship just to manage your finances or healthcare.
2. Avoids Costly Legal Delays
A valid Power of Attorney allows your agent to act quickly in urgent situations—paying bills, managing assets, filing taxes, or making medical choices. This avoids court delays and ensures continuity in your affairs.
3. Gives You Control Over Who Acts for You
By naming a trusted person as your agent, you are choosing who will manage your affairs if needed. Without a POA, a court could appoint someone you wouldn’t have chosen—or who may not understand your values or preferences.
4. Helps Family Members Avoid Stress and Conflict
When no POA exists, families may disagree over who should make decisions or how to handle financial matters. A clearly drafted POA helps prevent disputes by providing clarity and legal authority.
When Should You Create a Power of Attorney?
The best time to create a Power of Attorney is now, while you are healthy and capable of making decisions. Waiting until something happens may be too late. Once you are incapacitated, you cannot legally execute a POA, and your loved ones would need to petition the court for authority.
This document should be part of your broader estate plan, alongside your will, trust (if applicable), and advance healthcare directives.
Choosing the Right Agent
Choosing your agent is a critical decision. You should select someone who is:
Trustworthy and responsible
Able to handle financial or medical matters
Willing to act in your best interest
Available and geographically close, if possible
It is also a good idea to name an alternate agent in case your first choice is unavailable or unwilling to serve when needed.
Final Thoughts
A Power of Attorney is not just for the elderly or the wealthy—it is a vital planning tool for any adult. It protects you, your family, and your assets during times of crisis and ensures that your affairs are managed according to your wishes.
If you do not yet have a Power of Attorney, or if it has been several years since yours was reviewed, now is the time to act.
Contact our office today to learn more or to schedule a consultation to create or update your Power of Attorney as part of a comprehensive estate plan.
