It is a legal document that designates an individual to make decisions on your behalf in case you cannot make choices for yourself. The individual is your personal agent: someone who acts in your best interests if you are unable to for whatever reason. A Power of Attorney gives your agent certain abilities, like handling your finances, filing your taxes, or making medical decisions for you.
That sounds like a lot of power. When would I need a Power of Attorney?
There are different powers of attorneys for different circumstances and for different lengths of time. You could need a power of attorney if you decide to live overseas for a few years, if you become incarcerated, if you fall into a coma, if you become affected by dementia, or a host of other financial or healthcare-related reasons. A Power of Attorney generally comes into play when you become incapacitated.
Okay, that could be helpful. Why do I need a Power of Attorney?
Everyone should establish a power of attorney. Anyone can become incapacitated at any time, but it is especially important for seniors to set up a power of attorney before they become physically or mentally incapacitated. That way, you can ensure that someone will get your estate and your affairs in order. Otherwise, if you become incapacitated without a POA in place, then no one can handle your affairs until someone pays a lawyer to go to court and be appointed your guardian and conservator. So not only do you risk leaving your affairs in limbo, but you also risk not being able to choose the person who handles those affairs.
A Power of Attorney is very valuable because it appoints a spouse, child, loved one, attorney, or friend to can handle your estate, health, and finances if you become unable to do so yourself, rather than wait for the worst to happen without having a plan in place.