After watching the film Amour, about an elderly gentleman who becomes caretaker to his wife after a stroke, I feel compelled to share some information on powers of attorney.
A power of attorney is a legal document in which you give someone power to manage your financial affairs. The person you appoint is called your attorney-in-fact. You can give your attorney-in-fact broad or limited powers, over all your assets or just a portion, and starting immediately or only after a certain condition (such as a stroke).
Together with an advance directive for healthcare, a power of attorney is how you appoint a loved one to manage your affairs if you become disabled. The trouble is, you can only create a power of attorney or healthcare directive if you still have mental capacity to understand serious decisions. If a person has suffered a stroke or is in later stages of Alzheimer’s or dementia, it is often too late to make a power of attorney.
Without a power of attorney and healthcare directive, then the only way anyone can manage your affairs is to apply for guardianship, a process that is often expensive and emotionally painful.
In addition, with a power of attorney and healthcare directive, you appoint an agent to act on your behalf. You can give or withhold from your agent whatever powers you want, and provide advance instructions to your agent on how you want your affairs managed. A guardian’s powers, on the other hand, are set by the court, with far less control by you. With an agent you appoint by power of attorney or healthcare directive, you have power over your agent. But a guardian has power over you.
With diseases like dementia and Alzheimer’s, mental capacity often seeps away over time. That is why it’s important to put these documents into place while you are healthy. In addition, if you may need long term care in the future (e.g., in a nursing home), then it is important to include provisions in your power of attorney related to Medicaid planning. At FriedmanLaw, we will work with you to create a thorough power of attorney. Call us today at (908) 704-1900 to make an appointment.