How a Power of Attorney Functions in Your Estate Planning

A Power of Attorney has the remarkable ability to adapt to many situations, from managing real estate transactions to making financial or healthcare decisions. Simply put, it’s a legal document that grants a person the authority to act on your behalf.

In Arizona, where it seems the only constant is the pursuit of that perfect golf swing, think of your Power of Attorney as your trusted caddy, ready to help you navigate the hazards of life’s fairways and keep your estate out of the rough. At Brown & Hobkirk, PLLC we understand the significance of estate planning, and like your caddy, we’re here to guide you through the invaluable functions a Power of Attorney can play in your estate planning.

Types of Power of Attorney

In Arizona, you have several types of Power of Attorney (POA) at your disposal that address a wide range of needs.

1. General Power of Attorney: This type grants broad authority to an agent to manage financial and legal affairs on your behalf. It’s often used for convenience, is effective immediately, and continues after incapacitation.
2. Limited Power of Attorney: A limited POA is more specific in scope. It specifies the tasks an agent can perform on your behalf. Since you can designate certain tasks or set limitations, this POA is best suited for financial transactions or legal matters.
3. Healthcare Power of Attorney (or Medical Power of Attorney): This designates an agent to make medical decisions if you become incapacitated or are unable to make decisions for yourself.
4. Springing Power of Attorney: This POA only becomes effective after a specific triggering event (EX: incapacitation).

The type of POA you choose should align with your specific circumstances and needs. The experienced attorneys at Brown & Hobkirk, PLLC can help you by explaining the Power of Attorney options that offer you the best flexibility and peace of mind for the management of your financial, legal, and healthcare matters.

Appointing the Right Agent

One of the most fundamental aspects of responsible estate planning is picking the right POA agent. Doing so will provide you with peace of mind that your affairs will be handled competently and in accordance with your wishes if you become unable to do so yourself. Here are some tips that can help guide you on picking the right agent:

• Trust: You should pick someone you trust completely. Remember, this person will have access to all your financial accounts and the power to make healthcare decisions for you. You want to make sure your agent will always act in your best interests.
• Knowledge: Your agent should possess the knowledge necessary to fulfill their designated responsibilities. This can include understanding financial matters, legal obligations, or healthcare choices.
• Communication Skills: Effective communication is critical. Your agent should be able to understand your wishes and instructions and be able to communicate clearly with all relevant parties (EX: banks, attorneys, or medical professionals).
• Availability: You want to pick someone who can fulfill their duties quickly, especially in urgent situations. Your agent should be accessible and responsive when needed, so it’s usually advisable to pick someone who lives locally.
• Understanding Your Values: Your agent should understand and respect your values, beliefs, and priorities. This is really important for healthcare-related decisions. For example, if you’ve listed “do not resuscitate” on your healthcare POA, you want to make sure to pick someone who will be able to follow through with that choice, if needed.
• Contingency Planning: In the event that your primary agent is unable or unwilling to act, appointing an alternate agent offers you a safety net.
• Regular Review: You should periodically review and update your Power of Attorney documents, especially if your preferences or your agent’s circumstances change.

Specific Powers and Limitations

Having your POA in place empowers you to make informed choices about your future, maintain control over your affairs, and provide a practical solution for decision-making when it’s needed most.

However, you should be aware that there are also limitations to POA’s. First, a key limitation is a POA isn’t valid after your death. Once you pass away, the POA becomes void and loses its legal authority. After death, your executor or personal representative will handle the estate and distribution of assets. Second, POA’s are specific to the powers granted within the document. If a particular power isn’t explicitly outlined, the agent won’t have the authority to act in that capacity. Lastly, a springing POA only becomes effective upon a specific triggering event, such as your incapacity. If the triggering event isn’t clearly defined or if there is a dispute about it, this can lead to delays or legal challenges.

It’s essential to have your POA carefully drafted so that all necessary powers are included; if you fail to do so, certain decisions and actions may be left unaddressed.

Get Help from Our Estate Planning Attorneys

If you have questions about how to handle your Power of Attorney or need assistance with other estate planning issues, Brown & Hobkirk, PLLC can provide the legal help you need.

Our estate planning attorneys understand the importance of protecting your assets. Contact us today to schedule a consultation and learn more about how we can help incorporate a Power of Attorney into your estate plan.