What’s Power of Attorney and Do I need a Lawyer for it? – Road to Retirement
No, you don’t, but there are situations where a lawyer might be able to help save you time, money, and a whole lot of headaches.
The biggest thing a lawyer can do for retirees is help them set up health directives and do their estate planning. This is fancy legalease for: setting up power of attorney and getting a will and trust sorted. Both of these processes can be done without a lawyer but are usually a lot easier with one. Since Power of Attorney is quite complicated, we are going to start there, but look forward to an article in the future breaking down wills, trusts, living wills, irrevocable trusts, and more in the future.
Power of Attorney
Laws surrounding powers of attorney (POA) differ from state to state, but for the most part, power of attorney refers to a legal document that gives someone else (known as the agent) the legal right to make very important decisions on your behalf should you become unwell or unreachable.
This documents have a couple of requirements to be seen as legally valid:
-You must be at least 18 years old
-You must have the mental capacity to understand what a POA is
-You must sign and date your POA in the presence of a notary public or two competent adult witnesses (who aren’t the person you’re naming as your ‘agent,’ your doctor/caretaker, or an employee of a place that’s giving you medical care, like a nurse)
There are some extra restrictions on specific types of powers of attorney documents if they concern things like real estate or your health that make things a little tricky, but it’s all for your benefit.
You can create a power of attorney on your own without a lawyer. But! That’s not always advisable. If your situation is unique or you want multiple powers of attorney set up, having a lawyer draw up the document might be better (and cheaper).
Types of Power of Attorney
Since you might not want the same person who makes financial decisions for you to also make medical or real estate choices for you, there are actually four different types of Powers of Attorney recognized by the state of California. These are fairly standard from state to state, but there are minor differences we recommend you look into if you’re retiring outside of San Diego.
General Power of Attorney: This form of POA allows an agent to handle your finances and business. It basically allows them to act in your name when it comes to paying bills, selling assets (like real estate), or filing your taxes. General POA’s are also called “Financial Power of Attorney.” This version of POA usually ends automatically should you become incapacitated. But that’s not always the case, depending on how the document is drawn up.
Durable Power of Attorney: This form of POA is probably what you think of when you think about power of attorney. This kind of POA is something that does not become voided if you are incapacitated or suffer mental decline. Basically, when you give this to someone, they will consistently have the power to act on your behalf unless you coherently say otherwise.
Medical Power of Attorney: This POA is simple. It allows your agent to make decisions for you when it comes to medical care. Generally, this type of POA is only in effect when you are unable to make the decision yourself. You’ll often have something like this if you’re ill or at risk of falling ill. This is sometimes called a health care directive.
Limited Power of Attorney: This is basically an “if/then” statement. If you have an issue, then the agent can act on your behalf, usually to do a specific task. For example, it can be something like, if you are incapacitated, then the agent can open your safety deposit box. It can be more complicated, for example, maybe you own a business in another state, you can create a limited power of attorney allowing them to act as the business’s owner while you’re out of state.
As you can see, powers of attorney can get quite complicated. Which is why a lot of people turn to professionals to write up these documents. As stated, there are online resources to help you create these on your own, but a lot of them cost money. The free services tend to be very difficult and hard to customize, but they exist.
For example, Free Will is a not-for-profit business that allows you to create legal documents on your own. They allow you to make a Health Care POA, a Financial POA, and other important documents like a Will/Trust. Click here to check them out.
If this is all over your head, you can always hire a lawyer. There are many great options in the San Diego area. You can even use SDPEBA’s MetLife Legal plan to get it settled very easily (and for a much lower price). The MetLife Legal plan lets you find a local lawyer who specializes in these documents. For more information click here or contact us! Call 888-315-8027 or email [email protected].