Power of attorney is an important legal document that everyone should have, regardless of age or financial circumstances. It is not just for the elderly or those with significant assets.
A power of attorney gives the person you have designated, known as your agent, the legal right to make decisions for you should you become incapacitated. When you create your power of attorney not only do you name your agent, you also state exactly what powers you wish them to have.
If you should become incapacitated and have no standing power of attorney, the court will appoint someone to act as your guardian and decide what kind of decision making powers that person will have. The guardian may end up being someone you would not have chosen, and they may end up with decision-making powers you would not necessarily have granted. Having the court appoint your guardian can also cost your family money in fees – sometimes more than $1000.
Different Types of Power of Attorney
There are two types of power of attorney that are especially pertinent to estate planning. They are known as “springing power of attorney” and “durable power of attorney.”
A springing power of attorney is one that becomes effective only under circumstances specified by you. For example, you may wish that your agent act for you if you become incapacitated. In that case, your agent would have to provide doctors’ letters and/or court orders before being able to act on your behalf.
There are, unfortunately, some issues that can arise from using this. While the paperwork is acquired and presented, your designated agent is unable to act. Further, you must clearly define what “incapacitated” means in activating your power of attorney. Lastly, issues of privacy and legal matters such as the Health Insurance and Portability and Accountability Act (HIPAA) can delay maters.
In contrast, a durable power of attorney becomes effective immediately, specific to the predetermined how and when, and no documentation of incapacitation is necessary for your agent to be able to act.
Choosing an Agent
When designating an agent, you can choose a trustworthy family member, or friend, or use an outside party such as a bank or lawyer. Keep in mind that with an outside party you will have to determine how much that person is paid. Compensation could be anything from hourly fees to an annual percentage of your assets; whereas you might not have to pay your friend or relative.
Consult with an experienced estate planning lawyer who can help you decide which type of power of attorney is appropriate for your needs, and help with naming a suitable agent. This is one legal document no one should be without
Chester County Wills and Estates Lawyers at Eckell Sparks Assist with Power of Attorney and Estate Planning
For all your estate planning needs you can turn to the experienced Chester County wills and estate lawyers at Eckell, Sparks, Levy, Auerbach, Monte, Sloane, Matthews & Auslander, P.C. Our skilled legal team provides a broad range of trust and estate services. Call us today at to schedule a free consultation or complete our online contact form. With offices located in Media and West Chester, Pennsylvania, we work with clients throughout Delaware County, Chester County, Montgomery County, and across the Philadelphia metropolitan area.