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The Importance of Powers of Attorney

October 20, 2017

By Sharon L. Steingard, Esquire

The importance of preparing powers of attorney when one is capable and competent to do so cannot be overstressed. As a rule, most lawyers recommend two different powers of attorney – One for financial and one for health care.

A financial power of attorney gives another person the legal authority and ability to step into one’s shoes and handle their business and financial transactions. This type of power of attorney can confer immediate authority, which is usually done for convenience between spouses, or it can become effective in the future if a doctor certifies that the person has become physically or mentally incapacitated to the extent that they are incapable of handling their business and financial affairs.

If a person does not have a financial power of attorney and becomes incapacitated, their spouse or next of kin will not be able to access their solely owned bank accounts and other financial accounts. This can cause significant problems. For example, if a person without a financial power of attorney is hospitalized or completely incapacitated and in a long-term care facility, their next of kin will be unable to pay their bills, manage investments, pay for care or take care of any other business that the incapacitated person otherwise would have handled.

Another very important power of attorney is for healthcare, which acts as a waiver of HIPPA privacy rules so that a person’s “healthcare agent” will have legal authority to speak with their doctors and obtain and review their medical records. In addition, if one becomes unable to give informed consent for a treatment, the healthcare power of attorney authorizes their agent to make medical treatment decisions on their behalf. Treatment decisions pursuant to a healthcare power of attorney are not limited just to end-of-life decisions. They may also cover a wide range of medical treatment decision making, from flu shots to do-not-resuscitate orders, and everything in-between.

If no power of attorney has been executed, the person’s next of kin does not have the legal authority to make financial or medical decisions on their behalf, or even to see their medical records. Instead, to gain these rights the next of kin would have to hire an attorney and petition the Orphans’ Court to be appointed as a guardian to handle financial affairs and medical decision making. This can be time-consuming and expensive. It can also be avoided, simply by executing appropriate powers of attorney when one is capable, competent and able to do so.

If you have questions about executing a Power of Attorney, please contact any of the Wills, Trusts & Estates attorneys at Willig, Williams & Davidson at (215) 656-3600.

   
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