Do I really need a Power of Attorney?
There is no legal requirement that you execute a Power of Attorney, financial or otherwise. You could go through life never having to give someone else authority to act on your behalf. But, what are the chances that you will go through your whole life never needing someone to step in and act on your behalf even if it’s just for a short period of time? That you will never find yourself in the hospital unable to transfer money to cover bills or unable to communicate your medical decisions? That you will always maintain you mental faculties? Probably pretty remote.
So what happens if you never appointed an agent to act on your behalf? The Court will have to intervene. A petition will be prepared to have you declared incapacitated and a guardian will be appointed to make decisions on your behalf. Once you are declared incapacitated, you can no longer make legally binding decisions for yourself. The Court will now require your guardian to file annual reports of all of your assets and income. This is an intrusion most people want to avoid. Preparing a Power of Attorney and appointing someone to act as your agent for financial and medical decisions while you are competent avoids involving the Court in a guardianship process. Continue Reading Commonly Asked Estate Planning Questions – Day Four