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I often get asked the question by clients (some joking, some serious), “Why would I want to pay you to draft a power of attorney for me when I can get one online for free?” I get it. I know how hard it is to spend money on something that I don’t necessarily see the value in. With that being said, there are reasons why it is worth the time and money to have an attorney who works primarily in estate planning and elder law draft your powers of attorney, instead of going the online route.
First, it’s important to understand what powers of attorney are and the different types. Powers of attorney come in two main varieties: (1) Powers of attorney for health care and (2) powers of attorney for property. Powers of attorney for health care are pretty straight forward. You are naming someone to make your health care decisions for you if you ever cannot make those decisions for yourself. These documents are extremely important; however, the focus of this article is on powers of attorney for property, which are not so straight forward.
A power of attorney for property (also commonly referred to as a financial power of attorney) is a document that names someone to make financial decisions for you. An advantage of creating a power of attorney is avoiding guardianship through the probate court. A guardianship is an action where a person applies to be guardian over someone who can no longer make his or her own decisions. A person can be guardian of the person (health care decisions), guardian of the estate (financial decisions), or both. When you have an effective, well drafted power of attorney, you control who will make your decisions for you, rather than leaving the appointment of a decision-maker to the court. On the other hand, if you have no power of attorney and are in a car accident, and can no longer make decisions for yourself (whether in the short term or the long term), who will take care of your bills? Who will sign your tax return or handle real estate issues with your home? Who will go wait in line at the BMV to renew your car registration? If you have no power of attorney, or, if you have a power of attorney that is not customized to your situation or properly drafted, the only person who can legally act on your behalf is a person (or agency) who applies and is appointed as your guardian through the probate court in the county where you live. This guardianship process requires an application, securing a bond, having a background check, annual accountings and reports, and prior approval by the probate court of all expenditures. A guardianship is also a public record which anyone can view at any time.
The solution sounds simple. Why can’t you just print off a form from the internet, say you want your spouse to make any and all financial decisions for you and call it a day? You certainly could do that, but it is very likely that if you did become incapacitated, there would be gaps in the powers your agent needed to manage your affairs, in which case your agent would have to go to the local probate court to apply to be your guardian. Ohio Revised Code §§ 1337.21 to 1337.64 sets forth the law regarding powers of attorney. A critical aspect is that certain powers must be specifically stated in the document if the agent is to have the authority to carry out such powers. These are often referred to as “special provisions” or “hot” powers. Without these powers, your agent may find themselves not able to do what you would have wanted them to. When you print a form off the internet, you have no idea if it actually has the powers it should have and is compliant with our state’s law. If a power is missing, what happens? The agent has to go to the probate court in your county and apply to be your guardian in order to act for you. Even then, some powers you may grant under a financial power of attorney are not likely to be granted through a guardianship, since you are no longer competent to explain to the judge what powers you wish to grant to your guardian. Ultimately, if an inadequate power of attorney fails, there is typically nothing that can be done, short of seeking court intervention. In order to ensure your agent has the authority to act for you when it is needed most, it is very important to have your financial power of attorney drafted by an attorney with experience in estate planning and elder law and customizes it to fit your needs.
NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.
Written by:
Madison Chapanar Robinson, Esq.
Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A.
4775 Munson St. NW, Canton, OH 44718
330-497-0700 ext. 428
mrobinson@kwgd.com