If you’re someone who wants a say in how your financial, business and household affairs are managed, and who manages them, should you yourself be unable to do so, if you want to dictate how certain decisions about your health and well-being will be made, and who will make them on your behalf, should you lose the capacity to make those decisions yourself, then it’s important to put all that in writing, in legal documents that are known generally as powers of attorney.
Powers of attorney refer not to a certain lawyer’s superhero attributes, but rather to the legal authority a person (known in legalese as the “principal”) assigns to another party (such as a spouse, family member, friend, trusted adviser, attorney, etc.), giving that party the power to make decisions on behalf of, and execute the wishes of, that person, in circumstances where that person is not in position to make those decisions for himself or herself, as a result of being incapacitated, for example. The party to which the principal confers power of attorney thus becomes that person’s agent or “attorney-in-fact.”
Powers of attorney can be applied broadly or narrowly. They can be structured to apply to specific functions in specific circumstances, for specific periods of time. They are a vital legal and planning tool for people who want to ensure that their wishes are carried out, their assets are handled in a certain way, their intentions are fulfilled, and their interests are protected should they be unable to do so themselves. Without powers of attorney in place, those responsibilities can default to the legal or judicial system, where a person’s wishes, intentions and interests may be open to greater scrutiny, interpretation and thus, uncertainty.
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