One common estate planning misconception is when powers of attorney are required.
Powers of attorney are required if you are determined to be incompetent. Incompetency can mean a mental illness or a physical ailment, such as being unconscious. What a power of attorney does is grant someone with authority to make decisions on your behalf.
Most people don’t realize that a power of attorney is required even if it is your spouse or child. For your child, once they turn 18, a power of attorney is required for someone to make decisions on their behalf.
A spouse does not automatically have the right to make decisions on behalf of their significant other. In most cases this won’t matter since you are most likely a joint owner on their checking account anyway. However, for example, if you wanted to sell your home, you would need a power of attorney if your spouse is incompetent.
Without a power of attorney, the only other way to be granted with the required authority is to go through a relatively long and costly guardianship court procedure. A power of attorney is a simple way to fix this problem.
If you don’t have any powers of attorney in place or if you have any questions, please contact me.
© 2016 Crummey Estate Plan.