Having a power of attorney is associated with aging and becoming unable to manage your own affairs, but that’s a misconception. Adults at every stage of life can benefit from having these protections in place. It is easy to ignore estate planning and end-of-life arrangements when you’re in midlife and enjoying good health but waiting is the wrong choice for many reasons.
A qualified Illinois estate planning attorney can demonstrate why assigning a power of attorney is critical now: because so much is at risk in mid-life when your family is young and dependent upon you. Not having power of attorney in place when it’s needed can be a costly mistake, damaging your financial future and unnecessarily amplifying the emotional stress felt by your loved ones.
How Power of Attorney Actually Works
A power of attorney is a legal document that authorizes someone you trust as your agent or “attorney in fact” to make decisions on your behalf when you cannot. An agent must be over age 18 and cannot be your physician or a healthcare worker who attends to your care. The agent you name in a POA should be someone you trust to make appropriate decisions on your behalf.
Two primary types of POA commonly used in Illinois are for financial and healthcare decisions (more options are available for specialized circumstances). They can be immediately activated when signed or springing, meaning they activate when necessary (such as a healthcare POA that activates when you are incapacitated).
An accident, injury, or unanticipated illness is indiscriminate: it can strike anyone, at any time. Protecting your interests and your family’s welfare against financial catastrophe is paramount. Created in advance, a POA ensures that important tasks are completed to your specifications. With properly executed documents, your mortgage will be paid, business maintained, and care provided for those dependent upon you.
Key components of POAs:
- The term “durable” is critical to a POA designation. “Durable” allows for uninterrupted management of your affairs, but if not specifically durable, a POA terminates when you are deemed incapacitated.
- The scope of a POA must be defined. You may designate more than one person with POA for specific actions, such as for business decisions only, to sell specific items in your place, to make healthcare decisions for you, or to manage your family’s finances.
- Time limits can be written into POA documents, as can the method of revocation or amendment, creating guardrails for the person acting on your behalf. Unless otherwise specified, a POA may be revoked orally or in writing. A real estate POA revocation must be recorded with the county deed office where the original was filed.
- You can name your preference for a legal guardian in a healthcare POA if a court determines that guardianship is necessary. Providing the guidance in writing is valuable to the court’s decision making and can expedite the process.
- To be legally enforceable, a POA should be witnessed by an adult with no interest in your decisions (e.g., not the named POA or guardian, doctor, or healthcare employee, and not someone who might benefit from POA decisions made on your behalf). Keep copies in a safe place where family members can access them when necessary.
- POAs affecting the sale or transfer of real estate must be filed with the recorder of deeds in the county where your property is located.
Start Your Comprehensive Estate Plan
Putting POAs in place is the first step in establishing a comprehensive estate plan. The process is best handled by a qualified estate planning attorney from Legacy & Life Law Firm. When properly executed, the components of an estate plan, including your will, POA, healthcare POA, and real estate trusts will cover the important decisions that are necessary if you cannot make them yourself.