Preparing for Tough Times -- Establishing a Power of Attorney

Most of us would like to think that our mental faculties will never desert us or that we will always be conscious to make our own decisions. But if you remember Terry Schiavo, then you know that this is not always the case. Designating someone to have power of attorney over your business affairs and/or health care decisions can be critical in the time of need. Planning for these things in advance can help ease stress should such a time arise.

Power of attorney allows an individual to designate a person to make decisions on his or her behalf. Depending upon the kind you choose, they will have authorization to make decisions regarding medical treatments or how your personal affairs are handled. Powers can be limited or general, in which case the designated agent can act on your behalf in a variety of situations and not just special circumstances. An agent without limited powers can typically sign off on banking transactions, purchase life insurance, buy and sell property, file tax returns, make gifts, enter contracts and more. Even if you are not incapacitated, you can still have your agent act on your behalf; he or she cannot override your wishes.

Selecting a successor agent in advance is a good idea. This person will work on your behalf in the event that the primary designated agent becomes incapacitated or is unwilling to fulfill his or her duties to you.

In order to file for power of attorney, the principal, or person granting authority, must be able to demonstrate mental competence. And to verify authenticity of signatures so that the document cannot be challenged later, powers of attorney should be notarized. It is a common misconception that power of attorney must be filed by an attorney. Most of the 50 states have legal aid organizations that host downloadable power of attorney forms online. These easy to fill-in forms contain the legal language you need, but without the law firm price tag.

Just to help you get started, here are links to forms for Illinois, New York, California, Georgia, and Texas. If you don't live in one of these states, you can easily find your state's legal aid organization by using Google. There are countless other resources that provide power of attorney forms, but beware as some are available for a fee. Forms from legal aid organizations are always free.

Legal aid sponsored forms are great and work for most people; however, if you don't feel comfortable with signing a power of attorney without speaking with a licensed attorney, check with your local bar for a directory of their members.

Don't delay in establishing an agent to work on your behalf. Doing so now can save you and your family many headaches down the road.