This is the first article in a two-part series of articles on updating your plan. This first article discusses the importance of updating financial and medical power of attorney. The second part of the series examines the importance of updating your essential estate planning documents, such as a trust or will. Together, these documents are the cornerstone of even the simplest real estate plan and it is important to keep them up to date.
First, what is a power of attorney? It is a document by which you designate someone as an “agent” to act on your behalf. If that agent is unwilling or unable to act, the document can designate one or more successor agents. In other words, you are giving another person (the agent) powers that you already have. With a financial power of attorney, otherwise known as a permanent general power of attorney, you appoint your agent to make financial decisions on your behalf. Power can be formulated to be “instant”. In other words, the agent will have the ability to make decisions about your financial assets on the spot and without regard to your ability to make those decisions on your own. In most states, you can make the force “pop”, that is, it will only become effective on you Not The ability to act for yourself because of helplessness. The power of attorney is “permanent” if it continues even though you have a disability. A non-permanent power of attorney will not allow your agent to act while you are incapacitated.
A public health care power of attorney appoints an agent to make medical decisions for you when you are unable to do so on your own. HIPAA designates an agent for accessing protected health information.
It is important that you keep your legal representations up to date so that you have the people you want as your attorneys. Every year around the holidays it’s a good idea to look at your attorneys just to check if they name the people you want as your agents. One of your agents may no longer be suitable. Perhaps the person you called an agent is now too old or too weak to be your agent. You may have someone else you prefer as an agent. Perhaps one of your children is now an adult and you want to work as your agent instead.
The agents you choose under your power of attorney are vital to your disability plan. Make sure to retain the right people in these roles.
The next blog in the series will focus on the need to continually update your confidence to changes in your circumstances, wealth, and desires.
Stephen C. Hartnett, JD, LLM
American Academy of Estate Planning Lawyers, Inc.
9444 Balboa Street, Suite 300
San Diego, CA 92123
Phone: (858) 453-2128