Why Have A Power Of Attorney?
For estate planning, liability, convenience or other reasons, married couples often have assets - for example automobiles, real estate, stocks, mutual funds or bank accounts - in the individual names of the spouses rather than in their joint names. This means that those assets can only be controlled or sold by the spouse whose name is on the title, deed or account. If that spouse becomes incapacitated from an accident or medical condition, unless the incapacitated person has a valid power of attorney or living trust, no one - including the other spouse - will be able to act for the incapacitated person unless and until a court determines that the person is legally incapacitated and a guardian is appointed for that person. No one else - including a spouse - can act for another person unless that person has been given the legal authority to act. That legal authority comes from either a power of attorney, a living trust or a court decree appointing a guardian.
The same legal rules apply to an unmarried incapacitated adult - that person’s parents, children, friends or co-owner of assets cannot act for that person unless the incapacitated person has provided the other person with the necessary legal authority through a power of attorney or living trust. If neither document exists, a court-appointed guardian is the only method of vesting someone with the legal authority to act. Funds will be unavailable, bills may go unpaid, rights may be lost - all because no one has the legal authority or ability to act until the guardian is appointed.
With these legal principles in mind, we offer some reasons why a Pennsylvania resident should have a valid power of attorney:
- So You Alone Decide Under What Circumstances Someone Else Can Act For You If You Become Disabled.
- So You Can Name The Person Who Controls Your Financial Affairs If You Become Disabled- a judge decides who will be your guardian if a guardianship is necessary.
- So Your Family Is Not Faced With The Delay, Expense and Embarrassment of Having You Declared Incapacitated in a Court Proceeding In Order to Have A Guardian Named For You - a guardian can only be named after a court hearing requiring expert medical evidence.
- So The Person You Name To Act For You Can Take Those Actions You Specify Without The Need For Court Approval - a court-appointed guardian needs court approval for many acts that can simply be performed under a power of attorney.
- So You Will Save The Continuing Expense Of A Guardian’s Bond Generally Required Of A Court-Appointed Guardian - a guardian’s bond requires a premium payment every year of the guardianship.
- So That Your Family Can Take Any Necessary Actions With Respect To Your Financial Affairs That You Cannot Do For Yourself Because Of Your Incapacity - cash checks in your name, pay bills from your personal accounts, sell stocks in your sole name in a declining market, etc.
- So That Actions Can Be Taken With Respect To Any Of Your Assets That May Not Have Been Transferred To Your Living Trust - even if you have established a living trust - assets that are not in the living trust are subject to the same potential problems as if there was no living trust.
- So You Will Feel Content Knowing That You Have Made Things Easier For Your Loved Ones If You Become Disabled.
- Because It’s The Right Thing And The Smart Thing To Do.
Copyright 2011-14 Marc H. Jaffe
Warning - This document is for informational purposes only - it is not legal advice. It is intended to provide general information about persons who are residents of Pennsylvania. Your own particular circumstances, even if you are a Pennsylvania resident, may change the statements set forth above. For example, if you have a "Living Trust" that you created during your lifetime, many of these issues may have been addressed there. We recommend that you consult with an attorney who practices law in the state where you live before taking any action in reliance on any statement contained here.