Powers of attorney are among the most important estate planning documents. They take effect when an individual becomes incapacitated. People designate individuals they trust to act as their agents or attorneys-in-fact.
The selected agent can make medical decisions or conduct financial transactions on behalf of an incapacitated adult. Their support can be critical for those who run small businesses or have mortgage payments. An agent can also help ensure that an individual receives care that aligns with their personal values instead of the care that doctors consider standard in specific medical situations.
Adults may find the idea of giving someone else authority over their lives intimidating. Integrating certain limitations into power of attorney documents can help people feel more confident about arranging for support in the event of an emergency.
What restrictions can be useful for principals drafting powers of attorney?
1. Imposing a waiting period
Allowing an outside person to assume total control over an individual’s finances when they are only incapacitated for a few days might be an extreme and unnecessary solution. Frequently, those who experience comas or other incapacitating incidents recover enough to communicate with others within a few days. Some people add provisions to their powers of attorney that require that their incapacitation last a certain amount of time before the document takes effect. A waiting period of two weeks, for example, can help avoid missed payments while also limiting the possibility of an agent abusing their authority.
2. Naming co-agents
Another theoretical way to prevent abuses of legal authority involves splitting that authority between two or more people. A parent designating a family member as their agent could name both of their adult children in their documents. They then have to communicate with one another and agree on key matters before taking action on behalf of the incapacitated principal. People sharing the authority designated in powers of attorney are less likely to abuse that power.
3. Restricting access and authority
Particularly when drafting financial powers of attorney, limiting an individual’s authority is a reasonable decision. The principal might insist that their agent can only access one of their financial accounts or can only conduct certain types of transactions, such as paying bills.
Appropriate restrictions can help ensure that an individual has support when they need it without giving another person too much control over their health and finances. Working with a lawyer to create or update powers of attorney can be a wise decision. Those concerned about incapacity may have more reason to create or modify their estate plans than other adults.
