There are many different documents you can use in an estate plan to address what may happen in the future. One example is a power of attorney, which grants an agent the power to make important decisions on someone else’s behalf.
For example, an elderly person may be concerned about their own declining mental capacity, perhaps because they have been diagnosed with something like Alzheimer’s or dementia. With a medical power of attorney, they can choose an agent to work with their doctor and make important medical decisions, including authorizing life-saving care. With a financial power of attorney, they can authorize someone to pay their bills, handle real estate transactions or access bank accounts when necessary.
The role of incapacitation
With a springing power of attorney, a triggering event is necessary before the power of attorney actually goes into effect. The elderly person could draft the paperwork whenever they want and choose the person who is going to be their agent. But that does not mean this agent can immediately start making medical decisions on their behalf. The triggering event has to occur first.
Usually, the focus here is on a diagnosis of incapacitation. If the elderly person’s mental state declines so far that they do not understand the decisions they are making or lack the ability to do so on their own, they can be declared incapacitated. This is when the power of attorney kicks in, and their agent begins assisting them by making these important decisions with the elderly person’s best interests in mind.
A power of attorney is just one estate planning tool to consider. Anyone who is drafting a plan needs to understand exactly what legal options they have.
