Your two-page power of attorney just won’t cut it

When was the last time you dusted off those old estate planning documents you completed when your children were still young? If you can’t remember the last time you looked over your will and power of attorney, now would be a great time to do so. You might be surprised by how much your life has changed since you signed those documents.

People sometimes think estate planning is a “one-and-done” endeavor: You sign some paperwork and never think about it again. That mindset could have serious, irreversible consequences for you and your family, especially when it comes to your power of attorney.

A power of attorney (sometimes called a durable, general or financial power of attorney) is a document that you (the principal) execute to appoint someone else (the agent) to represent you in legal and financial matters. For example, a power of attorney might grant your agent authority to access your bank accounts and sign checks on your behalf. This authority can be helpful if you end up in the hospital and need someone to make sure your bills are paid while you are temporarily incapacitated.

It is common for older powers of attorney, and even some newer ones, to contain just two or three pages of basic powers, such as signing checks, conducting certain real estate transactions and managing insurance policies. While a basic power of attorney is certainly better than having no power of attorney at all, which often leads to a lengthy and expensive court proceeding, it will likely fall short in one or more areas when it is needed most.

Remember, basic planning does not cover complex situations. Let’s say instead of a brief hospital stay, you need long-term care in a skilled nursing facility after a dementia diagnosis. Your basic power of attorney may allow your agent to pay your bills, but your agent’s hands may be tied when it comes to asset protection and preservation, including strategic gifting, or helping you qualify for available public benefits, such as Medicaid, to help cover the cost of care.

This is just one example of how a basic power of attorney can create problems for you and your loved ones, though the list is practically endless. A thorough power of attorney may be the only thing standing between leaving a lasting financial legacy for your family and spending tens to hundreds of thousands of dollars on long-term care.

Don’t wait until it is too late. Contact a trusted elder law attorney today and take the first steps toward ensuring you have the right plan in place.

For educational purposes only. This is not legal advice. Lisa Hostetler Brown is a Certified Elder Law Attorney certified by the National Elder Law Foundation. 2 Hampton Hall Blvd, Ste 100, Bluffton, SC 29910. | 843-757-5294 | LawyerLisa.com.