Should you name your spouse as your durable power of attorney?
Not all powers of attorney function the same. As we describe on our estate planning website, a durable health care power of attorney, or POA, involves different representation than a durable general POA. Yet both types are important to include in one’s estate planning.
The durable health care POA is one way to ensure that fighting doesn’t erupt between family members confronted with a loved one who is no longer able to make medical decisions on his or her own. The POA document not only designates an individual with that task, but can also be an effective way of preventing others from interfering in the medical decision-making process.
Financial and other non-health matters, in turn, are addressed by a durable general POA. Its scope might include powers over banking and retirement accounts, insurance policies, how real estate is handled, or other matters.
It is important to consult with an attorney to ensure that a POA has been properly executed. An attorney will clarify the type of triggering event, such as incapacity, that will make the POA effective. Notably, a doctor may be required to declare an individual incompetent before a triggering event is deemed to have occurred. Alternatively, POAs can also be drafted to take effect immediately, potentially avoiding that extra step.
An attorney can also answer misconceptions about POAs. For example, a married couple might think that POAs are unnecessary if they jointly own assets. However, this may not be true for all types of assets, such as a spouse attempting to liquidate assets in order to cover the medical costs of an incapacitated spouse. The spouse may want to sell jointly titled real estate or have access to the other spouse’s retirement account funds. Yet without a POA, there may be additional hurdles, perhaps having to go to court to obtain a guardianship. Our estate planning law firm can help you plan around such hassles.