What is a Power of Attorney?

If you are just starting your estate planning journey, you probably have a lot of questions like: “what the heck is a power of attorney, and do I need one?”

A legal document outlining who should act on your behalf should you become incapacitated, a power of attorney is a useful tool to include in your estate planning toolkit. By drafting a power of attorney, you (the “principal”) get to choose a trusted person (the “agent”), to fulfill this important duty (or important duties), so it is critical to ensure you choose someone who you know will put your interests ahead of their own.

There are a few different types of power of attorney for you to choose from, depending on your preferences and circumstances. Each type entrusts the agent with specific responsibilities should the principal need support or become incapacitated and unable to perform these duties on their own behalf. Responsibilities of an agent may include making financial decisions or healthcare decisions, appointing a guardian for minor children, making monetary gifts, and more.

Here at Margerie Law, I help people just like you navigate the often complex world of estate planning. Read on to learn more about powers of attorney and give me a call to discuss your situation.

Unless your circumstances are very unique, you will likely choose to draft one or more of the following types of powers of attorney: 

• General (Non-durable) Power of Attorney. With a general power of attorney, the agent is entrusted with most, if not all, of the same responsibilities that the principal would perform themselves. This includes opening and managing financial accounts, signing documents, paying bills, making guardianship decisions, gifting money, and more. You may even decide to draft a general power of attorney should you need guidance and support in making any of the above decisions. A general power of attorney is terminated when the principal revokes the power of attorney, becomes incapacitated, or passes away.
• Durable Power of Attorney. A durable power of attorney entrusts the same responsibilities as a general power of attorney but includes a “durable” article that allows the power of attorney to stay in place should the principal become incapacitated.
• Limited Power of Attorney. Also known as a “special power of attorney,” this type entrusts an agent with a specific responsibility, usually for a limited amount of time, before the power reverts back to the principal. Some examples include naming an agent to sign a deed to a property if the principal is out of town or appointing an agent to make investment decisions on behalf of the principal.
• Springing Power of Attorney. A springing power of attorney is a document drafted for use at a future date. This type of power of attorney is triggered by a certain event, such as the principal becoming incapacitated. At this time, the agent takes over the specific responsibilities outlined in the document. One crucial element to a successful springing power of attorney is a clearly laid out set of standards for determining what “incapacitation” means for the principal. An experienced attorney can help you navigate this piece.
• Healthcare Power of Attorney. A healthcare power of attorney names an agent to make medical decisions on behalf of the principal should they become unconscious or otherwise incapacitated and unable to make the decisions themselves. Note: in the State of Wisconsin, the power to make medical decisions does not automatically pass to a spouse should the principal become incapacitated, so having a healthcare power of attorney is critical, even if you’re married.

Estate planning can be confusing; at Margerie Law, we help make it easy. Creating your estate plan means you are protecting what’s important to you for the long haul. No matter where you are on your estate planning journey, it’s time to take your next step. Offering families in Milwaukee, Wauwatosa, Brookfield, Elm Grove, surrounding communities the peace of mind that comes with expert estate planning guidance including wills, trusts, and powers of attorney. Give Margerie Law a call to get started today.