What Can Happen if You Don't Have a Power of Attorney?

By Heather Frances J.D.

If you suddenly became unable to handle your own finances or make your own health care choices, a person you appointed in a power of attorney -- your agent -- could make decisions for you and take care of your financial affairs. Without a power of attorney, however, your family may have to go to court to obtain permission to manage these areas of your life when you are no longer able to.

Power of Attorney for Finances

If you wish to give your agent power to access your bank accounts, pay your bills, obtain loans or perform other financial acts for you, you can give him a power of attorney for finances. You can give your agent a limited power of attorney, which grants your agent certain limited powers, or you can give him a general power of attorney, which grants him broad authority. You may also choose to make your power of attorney durable, meaning it remains in effect if you become incapacitated. If you only want your agent to have authority if you become incapacitated -- and not before -- you can give your agent a "springing" power of attorney that will only become effective if you become incapacitated.

Power of Attorney for Health Care

A power of attorney for health care or medical power of attorney gives your agent authority to make medical decisions for you if you become unable to make medical decisions for yourself. Typically, your power of attorney for health care lists your preferences for medical care and end-of-life care, such as artificial respiration and artificially-supplied nutrition and hydration. If you become incapacitated, perhaps because of dementia or Alzheimer’s disease, your agent can carry out your wishes.

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Without a Power of Attorney for Finances

While you are capable of handling your own finances, a power of attorney for finances may not be necessary. However, if you become incapacitated and don’t have a power of attorney for finances, your loved ones may have difficulties taking care of your financial affairs, such as paying your bills or cashing checks written to you. Your family may be forced to petition a court to be appointed as your legal guardian or conservator in order to gain the powers they need to care for you.

Without a Power of Attorney for Health Care

If you don’t have a power of attorney for health care, your end-of-life care preferences may not be known or may not be carried out. This can place a heavy burden on your loved ones since they may be forced to make tough decisions about your care at a time when they are already emotionally drained. Also, family members may disagree with any decisions made, causing strain on family relationships.

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Guardianship Vs. Durable Power of Attorney

No one likes to consider the possibility of becoming physically or mentally incapacitated. However, guardianship and durable power of attorney provide two possible alternatives to ensure the proper handling of your affairs if you are not able to do so for yourself. The two roles are similar, but there are significant differences between them.

What Happens If an Agent With Power of Attorney Becomes Incompetent?

If handling your own financial affairs is a challenge, or you worry that you will not be able to manage your affairs in the future due to illness or loss of capacity, you have the right to designate another individual as your agent via a power-of-attorney agreement. An individual with power of attorney can pay bills, sign contracts and manage investments on your behalf. Should your agent become incompetent, however, your finances may be at risk.

How to Appoint a Power of Attorney

A power of attorney allows one person to act on behalf of another person in various matters, including health or finances. You may give another person, known as your agent or attorney-in-fact, power of attorney as long as you're mentally competent. You must draft a power of attorney document that meets the legal requirements in your state in order to give your agent authority.

Power of Attorney

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