Giving Power to Others to Make Decisions for You

By Mark T. Coulter, Esquire
Estate Planning Attorney

Scientists estimate that the Earth has been in existence for 4.5 billion years. During that time, it has managed to keep on spinning, tides going in and out, sun rising and setting, without any help from you or me. That is the way life operates today too: It keeps moving forwards even when we aren’t able to do our part to help. Most people live their lives with the reasonable assumption that tomorrow will be pretty much like yesterday was, as will the day after tomorrow. Most days, these assumptions prove to be correct. Then, BAM. Out of the blue, life throws us a curve ball. We’re in a car accident. A parent gets gravely ill. We get sent to Amsterdam to open a new branch office. We suffer a stroke. When today is far different than yesterday, it can cause a lot of stress. More importantly, when it looks like tomorrow and the days thereafter are going to be similarly off kilter, the state of our affairs become unbalanced as well. If you are seriously hurt in a car accident, who will make medical decisions about what care is appropriate while you are unconscious? If your parent’s condition looks very bad, how much care should they be given if there is no hope? Who will pay your bills and deposit your checks while you’re overseas for three months? If a stroke leaves us incapacitated, who will look after your financial affairs, your health, your business…

A necessary part of planning is taking the time to plan for the unexpected. While the unexpected is, by its very nature, not capable of precise planning, the centuries of human experience which lies behind us has demonstrated a number of items which are not highly unlikely, and should be planned for. We also have available to us a number of tools for dealing with most of the other curveballs, with ‘catch all’ planning documents which provide protection when these things occur. Because no matter what, whether you plan ahead or not, that world is going to keep on spinning, tides going in and out, and bills coming due. Avoid the personal, emotional and financial toll on yourself and your loved ones by including planning directives like Advanced Health Care Directives and Powers of Attorney when you address your other estate planning needs.

Powers of Attorney

A Power of Attorney establishes a reliable relationship between a person giving the power (the Principal), and the person to whom the power is given (The Agent). With a proper and effective Power of Attorney, the Agent can take action on behalf of the Principal just as though the Principal was taking the action themselves. Other people are permitted to rely upon the decisions and actions of the Agent taken on behalf of the Principal, because the Power of Attorney tells them to. The Power of Attorney can be the most useful and flexible device available for dealing with most of the uncertainties of life that wait around the bend which may interfere with our own ability to act for ourselves.

Powers of Attorney documents come in many different forms, for different purposes. You can execute a power of attorney for single transaction, such as permitting your spouse to sign a deed for you because you can’t attend a real estate closing on your house. At the other extreme, you can empower someone to make the ultimate decision whether to ‘pull the plug’, and remove life sustaining medical care when you are in a terminal condition and unable to make such a decision for yourself. In between, you can use a POA to give people all sorts of limited control over yourself, your personal property, your financial affairs, and even your estate planning needs.

The Agent under a POA has such authority at the POA document gives him. The POA, which must be in writing, can enumerate specific items which the Agent is authorized to do on your behalf. For example, you can permit someone to deposit and cash checks on your behalf, and write checks from your account to pay your bills. Such specifically described and limited powers are described as a Limited Power of Attorney. Your agent is only authorized to do those things listed in the POA. If anyone lets him take any other action on your behalf, then such persons can’t try to bind you to the Agent’s decisions or conduct, because you didn’t authorize it.

Alternatively, many people execute a General Power of Attorney. A General Power usually contains a long list of things which the Agent is authorized to do, typically drawn from a statute which describes permissible powers, coupled with the experiences of the Principal and their attorney. Further, there is typically a clause permitting the Agent to do “all nature of things which I could do on my own behalf”, or language to that effect.

About Our Law Office

At the Estate Planning Centers at Coulter & May, P.C., we devote our practice to estate planning and assisting families through such transition times with estate and trust administration counseling. We offer guidance and advice to our clients in every area of estate planning, and offer comprehensive and personalized estate planning consultations. For more information or to attend an upcoming seminar or to book a consultation directly, please contact us at (412) 253-7526 or visit us online at www.estateplanningcenters.com.

Disclaimer: The information presented in this article is a conversational summary of a complex area of law and should not be construed to constitute legal advice. No person should rely upon the content of this article for making any decisions, and should instead consult with appropriate legal and tax professionals.