A power of attorney grants another person the authority to step into your shoes and make legal and financial decisions on your behalf. This does not take away your authority to act, rather your power of attorney adds another person to your chain of command. When you give someone a power of attorney, you are giving them the right to exercise a power that you already have such as the power to spend money, sell property, cash checks, or withdraw money from the bank.
People often consider their spouse as a de facto agent- however, without written legal authority your spouse cannot sell your house, cash in your IRA in an emergency or sign legal papers on your behalf. Similarly, if you became incapacitated, your children would sign any required legal paperwork with their promise to be financially responsible- where as with a power of attorney, they could simply sign on your behalf.
A power of attorney can be the most useful document you ever execute. It can save your family time and money in a crisis and avoid the institution of a court supervised conservatorship- which in addition to being costly also make your illness and financial affairs public record.
However, a strong word of caution: A Power of Attorney is one of the most abused documents-with it you place your fiances in the hands of another. That other person should be utterly trustworthy, above reproach and have spending habits that are in line with your own. It is important to discuss whether this document is helpful to you with an attorney or trusted advisory. We are happy to help you evaluate this decision.
