“My mother executed this power of attorney….I have one question…..why does the attorney have the power after she dies?” This question accentuates the fact that many people are unclear as to the purpose and effect of this essential document. The “attorney” that this document references is not by default your lawyer, but rather an individual that you name to handle your medical and/or financial affairs. This individual is typically a family member or trusted friend.

A Power of Attorney is a legal document executed by an individual usually contemporaneously with a testamentary document such as a will or a trust. Within the terms of this document, the signor gives a named individual the right to handle his affairs during his lifetime. Often, an individual signs a medical power of attorney designating a representative to handle medical decisions and a separate financial power of attorney for money-related matters. It is important to remember that a power of attorney is in effect during the signor’s lifetime only. Upon death, all rights under the power of attorney terminate and the testamentary document typically goes into effect.

There are three types of powers of attorney that are often utilized. The first, a general power of attorney, goes into effect immediately upon signing. The named individual signs the document giving another the right to make her financial and/or medical decisions. A contingent or “springing” power of attorney only goes into effect after a physician signs an affidavit stating that the signor is not able to

handling his or her medical and/or financial affairs due to some incapacity. The third, a specific power of attorney, is executed for a specific sole purpose and only gives the power of attorney limited rights to act on behalf of the signor. Specific Powers of Attorney are often required when executing real estate closing documents on behalf of another.

The importance of executing powers of attorney for medical and financial purposes cannot be overstated. These documents clearly delineate your wishes in the event of incapacity and work to avoid the costly process involved in appointing a guardian and/or conservator to handle your affairs. By executing powers of attorney, you are assured that your designated representative will be there to protect you and your financial interests.