As your parents get older, you want them to be as comfortable as possible. Creating a will or a trust helps administer their estate after they pass away. However, estate planning requires much more than that, especially if your parent becomes incapacitated or incompetent and cannot make decisions for themselves.
A power of attorney appoints an agent or attorney-in-fact to act on your parent’s behalf, handling health or financial matters. If your parent becomes incapacitated or is unable to handle matters on their own, and they do not have a power of attorney in place, handling their affairs will be quite difficult.
To obtain a power of attorney, your parent (principal) signs a legal document that grants a trusted individual (agent) authority to make legal decisions on their behalf. The principal must be competent enough to appoint the agent and to sign the document with a notary and two witnesses present. The witnesses must be 18 years of age and cannot include the person signing on behalf of the principal, or the notary, or the agent.
The following are the steps the principal will take to make you the agent or attorney-in-fact:
- Parent selects agent. The parent selects someone who is trustworthy and capable of handling their affairs, usually part of the family or a close friend. It is recommended that a successor agent is selected if the first agent is unwilling or unable.
- Parent grants authority to agent. Usually, the parent handles their own affairs until they become incapacitated or incompetent. It is possible that the parent prefers the agent to begin their role because the parent is inconvenienced.
- Parent creates a healthcare directive, living will, or power of attorney. Once the agent and what authority the agent has is decided, the parent will need to work with an estate lawyer to create a power of attorney.
- The parent signs the power of attorney. The parent signs the power of attorney in front of witnesses and a notary while being of sound mind and cannot be declared legally incompetent.
- Parent delivers the power of attorney to necessary agencies. Copies of the power of attorney goes to necessary agencies and parties, such as a bank, agent, attorney, and the courts.
It is up to your parent when the best time is for them to get a power of attorney created. Most parents would like to establish a power of attorney after a diagnosis or when their health begins to fail. Others may want to establish one as soon as they retire.
There are different types of powers of attorney, including:
- General power of attorney: Sometimes called a financial power of attorney, a general power of attorney can be used for a healthy parent who wants help with financial or personal matters. It is also non-durable, which means it is void if the principal becomes incapacitated.
- Durable power of attorney: A durable power of attorney allows the appointed agent to make financial and medical decisions regardless of the principal’s mental or physical situation. It allows the agent to make decisions on behalf of the principal in the event of incapacitation.
- Medical power of attorney: A health care agent is appointed to make health care decisions for the principal should they become incapacitated, ensuring their end-of-life wishes are upheld.
- Limited power of attorney: A principal can give an agent a limited amount of power over specific matters stipulated in the power of attorney document.
- Springing power of attorney: A springing power of attorney goes into effect when the senior is declared incapacitated. The principal may want to handle their affairs until they are deemed incapacitated, specifying that the agent takes over at that time.
Some of the powers a principal can grant an agent include:
- Creating a trust for the principal.
- Borrowing money.
- Engaging in property transactions.
- Engaging in stock, bond, and other secure transactions.
- Entering safe deposit boxes.
- Making additions to an existing trust.
- Claiming an elective share of the estate of a deceased spouse.
- Engaging in insurance transactions.
- Engaging in retirement plan transactions.
- Receiving government benefits.
- Pursuing tax matters.
- Operating a business.
West Chester Estate Lawyers at Eckell Sparks Help Seniors and Their Families With Their Estate Planning Needs
Estate planning requires a legal team to guide you through its many processes. Our West Chester estate lawyers at Eckell, Sparks, Levy, Auerbach, Monte, Sloane, Matthews & Auslander, P.C. can help. Call us today at 610-565-3701 or fill out our online form for an initial consultation. With our offices located in Media and West Chester, Pennsylvania, we proudly serve clients in Delaware County, Chester County, and Montgomery County.