Estate planning is more than just deciding what happens to your assets after your death. A good estate plan will also contain your instructions for how decisions about your health, wealth, and legal responsibilities should be made in the event you aren't able to make those decisions yourself.
Creating powers of attorney, also called advance directives, is an essential aspect of comprehensive estate planning.
The Benefits of Advance Directives
Ensure Continuity of Decision Making
Powers of attorney allow individuals to appoint trusted agents or representatives to make financial, legal, and healthcare decisions on their behalf if they become incapacitated or unable to make decisions themselves. By designating someone to act on their behalf, individuals ensure that their affairs can be managed smoothly and efficiently, even during periods of incapacity.
Protect Assets and Finances
Financial powers of attorney empower agents to handle a wide range of financial matters, including paying bills, managing bank accounts, filing taxes, and making investment decisions. By appointing a financial agent, individuals can protect their assets and financial interests from mismanagement, fraud, or exploitation, especially in situations where they are unable to oversee their finances personally.
Ensure Healthcare Preferences are Honored
Healthcare powers of attorney enable individuals to appoint agents to make medical decisions on their behalf if they are unable to communicate their wishes due to illness, injury, or incapacity. Healthcare agents can advocate for the individual's healthcare preferences, make treatment decisions, and ensure that medical care aligns with the individual's values and beliefs.
Avoid Guardianship Proceedings
Without powers of attorney in place, family members may need to petition the court for guardianship or conservatorship to obtain legal authority to manage the individual's affairs. Guardianship proceedings can be costly, time-consuming, and intrusive, and they may result in the appointment of someone the individual would not have chosen to act on their behalf.
Maintain Privacy and Control
Powers of attorney allow individuals to maintain privacy and control over their affairs by choosing who will act as their agent and make decisions on their behalf. By specifying their preferences and instructions in advance, individuals can ensure that their wishes are known and respected by their agents and healthcare providers.
Plan for Potential Incapacity
Powers of attorney are proactive planning tools that enable individuals to plan for the possibility of incapacity due to illness, injury, or age-related decline. By creating powers of attorney while they are of sound mind and capable of making decisions, individuals can establish a framework for decision-making that will remain in place if they become incapacitated in the future.
Overall, powers of attorney are crucial components of a comprehensive estate plan that provide protection, continuity, and peace of mind for individuals and their loved ones.
General Durable Power of Attorney (Financial POA)
In Ohio, a general durable power of attorney is a legal document that allows individuals (referred to as the "principal") to appoint an agent or attorney-in-fact to manage their financial and legal affairs on their behalf. The term "durable" indicates that the power of attorney remains effective even if the principal becomes incapacitated or unable to make decisions.
The key components and features of a general durable power of attorney often include:
-
Authority GrantedList Item 1
A general durable power of attorney often grants the designated agent broad authority to act on behalf of the principal in financial and legal matters. This authority typically includes tasks such as managing bank accounts, paying bills, buying or selling property, making investment decisions, filing taxes, and handling legal transactions.
-
Durable NatureList Item 2
The power of attorney remains in effect even if the principal becomes incapacitated or mentally incompetent. This ensures that the designated agent can continue to manage the principal's affairs and make decisions on their behalf when they are unable to do so themselves.
-
Specific PowersList Item 3
The power of attorney document may specify certain powers that the agent is authorized to exercise on behalf of the principal. These powers can be tailored to meet the individual needs and preferences of the principal, and they may include limitations or restrictions as deemed appropriate.
-
Effective DateList Item 4
The power of attorney becomes effective upon signing unless specified otherwise in the document. Some individuals may choose to make the power of attorney effective immediately, while others may specify that it only becomes effective upon the occurrence of certain events, such as incapacity.
-
Revocability Write a description for this list item and include information that will interest site visitors. For example, you may want to describe a team member's experience, what makes a product special, or a unique service that you offer.
-
Agent Selection
The principal selects a trusted individual or individuals to serve as their agent or attorney-in-fact. It is crucial to choose someone who is reliable, competent, and willing to act in the best interests of the principal.
-
Witness and Notary Requirements
In Ohio, a general durable power of attorney must either be signed in front of two witnesses or acknowledged before a notary public to be legally valid. It is not required to do both, and between the two a notarized signature is much less likely to be successfully challenged in court.
General durable powers of attorney are valuable estate planning tools that allow individuals to appoint someone they trust to manage their financial and legal affairs if they become unable to do so themselves due to illness, injury, or incapacity. It's essential to work with an experienced estate planning attorney, such as myself, Attorney Parks, to ensure that the power of attorney document accurately reflects the principal's wishes and complies with Ohio law.
Springing Power of Attorney
Another option for setting up a general power of attorney is called a springing power of attorney; so called because it doesn't have any legal effect until a specific trigger happens at which time it "springs" into action.
Springing powers of attorney are valuable estate planning tools that provide protection and continuity in the management of financial and legal affairs in the event of the principal's incapacity. However, it's essential to consider the potential challenges and delays associated with relying on the determination of incapacity by medical professionals to trigger the authority granted in the power of attorney.
Advance Directives
Advance directives are legal documents that allow individuals to express their healthcare preferences and appoint healthcare decision-makers in the event that they become unable to make medical decisions for themselves due to incapacity. Advance directives help ensure that individuals' wishes regarding medical treatment and end-of-life care are known and respected by healthcare providers and loved ones.
There are two primary types of advance directives recognized in Ohio:
Living Will
A living will is a written document that allows individuals to specify their preferences regarding medical treatment and end-of-life care if they are unable to communicate their wishes. In a living will, individuals can outline the types of medical interventions they do or do not want to receive, such as life-sustaining treatments, artificial nutrition and hydration, and palliative care. Living wills provide guidance to healthcare providers and family members about the individual's preferences for care in situations where they are terminally ill, permanently unconscious, or in an end-stage condition.
It is important to understand that directives a principal places in a living will are going to be honored before instructions from a health care agent. Essentially, the living will "trumps" the power of attorney. Thus, a principal should only put directives down in a living will if they are absolutely certain they do or do not want to receive a specific type of treatment.
Healthcare Power of Attorney
A healthcare power of attorney, also known as a healthcare proxy or durable power of attorney for healthcare, is a legal document that allows individuals to appoint a trusted person, known as a healthcare agent or surrogate, to make healthcare decisions on their behalf if they become incapacitated. The healthcare agent is authorized to make medical decisions consistent with the individual's wishes and values, as expressed in the document. Healthcare powers of attorney are flexible and can cover a wide range of medical decisions, including treatment options, surgeries, medications, and end-of-life care.
In Ohio, advance directives must be signed by the individual making the directives (the principal) freely and purposely. Generally, the document is signed in the presence of a notary public.
It's important for individuals to discuss their healthcare preferences with their healthcare agent and loved ones and to provide copies of their advance directives to their healthcare providers and hospitals. Advance directives should be periodically reviewed and updated to reflect any changes in the individual's preferences or circumstances. Any specific instructions or restrictions the principal places in the power of attorney document are binding on the agent; the agent must make decisions that are in line with the instructions left by the principal. Conversely, if the power of attorney document is silent on an issue, the agent is only limited to making a decision that is generally in the principal's best interest and in alignment with the agent's general understanding of how the agent would make decisions.
By creating advance directives, individuals in Ohio can ensure that their healthcare wishes are honored and that they receive the medical care that aligns with their values and beliefs, even if they are unable to communicate those wishes themselves. Consulting with an experienced estate planning attorney, such as Attorney Parks, can help individuals understand their options and create advance directives that reflect their wishes and protect their interests.
