October 20, 2021 by Nancy Ling
Partner Nancy Ling regularly advises clients in the practice areas of wills, trusts, estate and incapacity planning, estate administration, residential and commercial real estate, property matters, corporate transactions and business law.
In this edition of Legal Matters, Nancy discusses the Power of Attorney. Most people know they need a Will; however, a Power of Attorney isn't as familiar. Nancy explains why it is important.
When we talk about estate planning, most people know they need a Will; however, not everyone is as familiar with Powers of Attorney. A will takes effect after a person dies, whereas a power of attorney is a tool to be used while a person is alive. It is essentially an agency agreement where you appoint someone to act as your agent or your power of attorney, to manage your financial affairs, usually in the event that you are no longer capable of handling them yourself.
You must appoint your agent while you are still of sound mind and still capable of understanding your assets and your obligations. This means you must plan for your Power of Attorney. If a situation has arisen where a person has already lost their mental capacity, for example, an unexpected brain injury, it is already too late to appoint your agent. In such situations, you can end up with unfortunate and unexpected consequences, for example, defaulting on a mortgage, lease, or other debts because no one can access your money to pay your bills. Plan ahead, and get a Power of Attorney well before you need it.