The Generations Legal Group Podcast

Why Powers of Attorney Are Non-Negotiable for Your Future

• Todd Whatley

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Understanding the significance of Powers of Attorney (POA) is crucial for anyone planning for the future. Legal expert Todd Whatley leads our discussion on why establishing a POA is a must-have for every adult, emphasizing the role it plays in protecting your interests and easing family burdens during times of uncertainty and incapacity.

• Definition of Power of Attorney and its importance 
• Types: Financial and healthcare POA explanations 
• Consequences of inaction: guardianship risks highlighted 
• Common misconceptions about POAs debunked 
• Selecting the right agent: trust and duties explained 
• Recommendations for developing a comprehensive POA 
• Call to action: Create or review your POA today for peace of mind 

Please call the office 479-601-4119 or go to generationslegalgroup.com for assistance in getting your Power of Attorney completed.


Information to help you answer all of your questions about aging.

Speaker 1:

Welcome to Answers on Aging, the podcast dedicated to helping you navigate the complexities of growing older. Your host is Todd Whatley, a certified elder law attorney with a passion for empowering the aging community and their families, From finances and legal matters to health, long-term care and beyond. We've got you covered, Because every question you have we aim to answer. Dive into today's episode and let's uncover the truth about aging together.

Speaker 2:

That's right. This is the Generations Legal Group podcast Answers on Aging, and my name is Todd Whatley and I am so thankful that you have joined us today. And today I want to talk about one of the most important documents that I think a person can do, and this is my personal opinion. But, as an elder law attorney, I think the most important documents you can do is a power of attorney. Okay, it gets overlooked, even in some estate plans that I see from other attorneys. They you know people bring in their entire estate plan and there's a trust and a poor over will, but there's no powers of attorney. I'm like, oh my God, I can't imagine doing an estate plan without having a power of attorney. So that is today's topic and that it is extremely crucial that you have powers of attorney. Okay, so what is a power of attorney? Basically, it's a legal document that grants authority to a trusted individual the agent to act on your behalf. Okay, it's a legal document giving someone else the power to do things for you. So there are primarily two types of powers of attorney. There is a a financial power of attorney and a healthcare power of attorney. The financial power of attorney covers managing money, paying bills, selling property, other financial affairs, like signing contracts or getting information from the bank or whatever. That's what a financial power of attorney does. There's also the healthcare power of attorney, which allows someone to make medical decisions for you when you're unable to do so. So why is this so important? Well, number one, you need someone out there that can handle things for you.

Speaker 2:

Typically, most couples appoint each other first because they know the business, they do things, but there are some times, particularly with late in-life marriages, there's kind of a newness there and they're like I think I want my kids to do this rather than my spouse, which is fine. It's your choice. And that's the one good thing about a power of attorney is you get to choose this. If you don't do it and I'll get into this but if you don't do a power of attorney and you become incapacitated, our only option is a guardianship, and then a judge has to decide who's going to do this. Will it be the new spouse? Will it be the kids? Well, you know there's issues there. You know who's going to do this better. You need to choose, and you can only do that with a power of attorney. So having someone out there being able to do.

Speaker 2:

That is great, but it becomes absolutely crucial when you become incapacitated and I do say when, because very few of us pass away having some time being incapacitated. Okay, you will spend some time. It could be just hours or it could be weeks to months, to years that you're incapacitated and if you have not done a power of attorney to allow someone to do what needs to be done when you become incapacitated, we have to go to court and we have to get a guardianship. We have to go to court and we have to get a guardianship.

Speaker 2:

A guardianship is a lot like probate. It is public knowledge, it is expensive and it is time consuming. Okay, you don't want to go to court and you definitely don't want a guardianship. So you know, I just can't force this enough. And the public, the particularly the medical people out there, are very pro-gardenship. Oh, just get a guardianship, that'll fix everything. No, it doesn't fix everything.

Speaker 2:

I think one thing people don't understand other than being public record, time-consuming and expensive, it is a lifelong commitment with the court. Every single year in Arkansas, you have to submit a report to the judge showing where every dime was spent and how the person is doing medically. This becomes a public record? Okay, you don't. You know we are very privacy conscious. We don't want our personal affairs out there for the world to see. But doing a guardianship means your personal and financial affairs are just out there for the world to see, so you don't want to do a guardianship means your personal and financial affairs are just out there for the world to see, so you don't want to do a guardianship. So therefore, you need to do a power of attorney. So A power of attorney ensures that people you know and trust are in charge of your finances and your health care decisions. Not a judge, not an unfamiliar court picking whoever shows up and looks the best and talks the best that day. Ok, this can also preserve family harmony. Ok, I recommend that you choose one power of attorney, and I know you have multiple kids and you don't want them to fight. But I'm just telling you to avoid problems down the road, I recommend you name one power of attorney, one person, to be the power of attorney. I'll do what you tell me to do, but if you appoint multiple agents as co-agents, it's going to be over my objection and over me begging you not to do that, but it's your documents. I will do what you want. It's just important that you get this done.

Speaker 2:

Another common mistake that I see is people will do what is known as a springing power of attorney. If I were to ask you, when do you want this power to come into play? Do you want it to be immediately or only when you become incapacitated? I would say a large percentage of you out there would say, oh, I just want this to become effective when I need it, when I become incapacitated. That sounds great sitting here today, but to make that happen can sometimes become a real issue. But to make that happen can sometimes become a real issue, just like with if you've heard me speak about how a successor trustee comes into power, that issue comes up there and also comes up here, meaning how do we prove that you're incapacitated? Many times it's you resign, it is you have been diagnosed by a physician with dementia incapacity and they say you should no longer be making decisions. So, therefore, this power of attorney is now sprung or comes to life, or we go to court. Well, the whole purpose of this is to avoid court, and so proving that you're incapacitated becomes difficult, particularly if you have some level of dementia and we have to prove that and you refuse to go to the doctor, then we end up in court and the whole purpose of a POA is to avoid court. So I don't like springing powers of attorney.

Speaker 2:

That's what a springing power attorney is. It springs to life once we deem that you're incapacitated. Let's don't have to go through that. Pick a person that you know and you trust your spouse, your kid, your neighbor, your niece or nephew, whoever it is. You should be picking people that you trust and therefore it's okay for them to have power now. Now they won't use it. Okay for them to have power now Now. They won't use it unless they need to.

Speaker 2:

But having an immediately effective power of attorney becomes very convenient. Okay, you're on a cruise, you're out in the middle of the ocean and the bank calls and says hey, we need a signature on this or else something bad's going to happen. Call your agent and say, hey, go down to the bank and sign that. We don't have to prove that you're incapacitated. We don't prove that. You know. We don't need to spring this power of attorney for them to be able to do something. It's immediately effective. They can just go down and they can just do it. It's extremely convenient to have it this way, but it's also a necessary situation when you truly do becoming incapacitated. We don't have to prove anything, we don't have to, you know, go anywhere, it's just the person can start doing it. All right, it should give you peace of mind, knowing that the agent is able to act without hurdles when needed. Okay. So the other thing is well, what if these people you know I am giving them a lot of power, I am letting them be able to do things.

Speaker 2:

And another thing with your power of attorney, it should be very comprehensive. Your power of attorney needs to let the agent do whatever needs to be done, including gifting, closing bank accounts, transferring money, doing things, because, particularly once we are trying to get you qualified for Medicaid, I need the agent to be able to do whatever needs to be done, including give away your assets. The only way we can protect your assets when you're married or single and trying to get onto Medicaid is the ability to transfer assets, and so many powers of attorney don't authorize that. It either is silent on the issue, which is bad, and sometimes it even says my agent shall not be able to gift. If you have a power of attorney and you're thinking, okay, I've got a power of attorney, I'm fine. I encourage you, go look at it and see if there is a section in your power of attorney that is labeled gifting and see are there limitations on it. If it says something about limited to the annual exclusion amount, that is a huge limitation, meaning that your agent can only give away $18,000 per person. That's for 2025. Could be 19,000 by now, but it's either 18 or 19. It's not a large amount and if we are limited by that, I can't protect your estate from Medicaid. You need to have unlimited gifting and typically the person that you choose as the agent should be a person that you want to give money to if it's a kid. So definitely don't have a limitation that the agent can't make gifts to themselves, and I see that in a whole lot of powers of attorney. So even if you do have a power of attorney, that doesn't mean you're you're good. Go look at it and see if there are those limitations, okay. So gifting, closing accounts okay. Switching accounts, terminating all of those things all the powers need to be in. So powers of attorney should be a part of your comprehensive plan.

Speaker 2:

I have talked about trust and beneficiary designations, things like that. But the number one thing I say this I always say on these podcasts I am not giving legal advice. On these podcasts, I am not giving legal advice. That's only given when you come in and meet with us as an attorney and I get all the facts and I give you legal advice. But I'm telling you everyone needs a power of attorney. That's not legal advice, that is just a fact. Everyone needs to have power of attorney and it should be part of your estate plan period. Okay, everyone needs to have power of attorney and it should be part of your estate plan period.

Speaker 2:

Ok, even if you don't have an estate plan what you think is an estate plan you definitely need to do power of attorney. When people call our office and meet with our intake coordinator, who is not an attorney, he will tell you Todd and Lauren will tell you you need to have a power of attorney and Lauren will tell you you need to have a power of attorney. Everyone needs to have a power of attorney, and not just any power of attorney, but a very comprehensive power of attorney that authorizes the agent to do whatever needs to be done. That's true for everyone who's over the age of 18. When my kids turned 18, they were sitting at my conference table doing powers of attorney. All right, because once they turn 18, they're adults. Just because I'm their dad and an attorney, that doesn't mean that I get to do things for them. They have to authorize that. So I encourage everyone to have a power of attorney.

Speaker 2:

Now, what are some objections to powers of attorney? You're probably sitting there thinking, well, I don't know, I don't, I don't, I don't think I I need to do this. Please Let me tell you. Yes, you're probably sitting there thinking, well, I don't know, I don't think I need to do this. Please let me tell you. Yes, you do, but if you're having some objections, let's go through those.

Speaker 2:

Number one people think, well, I don't need a power of attorney because I'm healthy, there's nothing wrong with me, I don't need it. Well, as I talked about, it's convenient. If you're out of town, if you are somewhere, you just don't want to get out. If you're out of town, if you are somewhere you just don't want to get out have a power of attorney who is able to go and do things for you, and particularly with health care decisions. We're not promised tomorrow OK, we're not promised health tomorrow and health can change very, very quickly and there are so many times that people call me and say, hey, dad's on his deathbed. He just got bad really quick and now we can't do anything with his bank accounts. There is no power of attorney. Can you come help us? I was like, well, I'll try, but if he's past the point of signing a document, we're stuck. We have to go to court and get a guardianship and there is a point when you can no longer sign this and so if you're able to sign now, you absolutely should sign now.

Speaker 2:

Another misconception is oh, my spouse, my child, they, you know, since I'm married to this person, or this person's my kid, they can just handle everything for me. That is absolutely incorrect. Okay, and even if you're married, particularly when you're married, you think, well, everything's jointly owned, my spouse can do it. That is true on the things that are jointly owned other than your home. If we need to do something with your home, if we need to sell your home and you're married, we need your signature. Even if the house is just in your spouse's name, we need the spouse's signature to sell that home. But almost always the home is owned by two people and therefore we need both signatures. And if you can't sign and there is no power of attorney, we can't sell your house until we go to court and get a guardianship. So you need to have a power of attorney and, like I said, many people appoint their spouse.

Speaker 2:

The other asset that is never co-owned is your IRA or your 401k. That is not co-owned, it is only owned by you. The IRA stands for individual. It's just owned by you, and for us to do something with that, if you're incapacitated, we need a power of attorney. A big thing that I see is oh, that's a lot of control that I'm giving to that person. I don't feel good about that.

Speaker 2:

Okay, well, pick a person you do feel comfortable with, or, if there is no one but you do have concerns, let me talk to them, bring them to the meeting with you and I will tell them the agent has a fiduciary duty. That is a high level of duty that they can only do with your assets. What is what is in your best interest. If they violate that, we can go after them criminally and we can go after them civilly, and I will tell them that it's like you are given a lot of power. And if you abuse this, if you take money out of the bank account and it's not for this person's best interest, I will come after you.

Speaker 2:

Okay, and I've had to make that allegation a few times because people think, oh, I'm power of attorney, I can do anything I want. Well, you can, but it's got to be in your best interest, okay. So how do you get started? Well, figure out who's going to be best. Typically that's your spouse, but it may not be your spouse. And if you're single, pick a person with a backup and a backup to the backup to decide. Okay, I want y'all to be my power of attorney. Figure out that. Get their name, their address, their phone number, date of birth helps, and call the office and come in and see us. Let our intake coordinator know.

Speaker 2:

Hey, I heard Todd's podcast about powers of attorney. I need to get that done and Doug can answer certain questions. Help you figure this out, but get that information and then Doug will get the attorneys that information, we will draft the documents and then you just come in one more time. We'll go through it with you, you'll sign it, we'll notarize it, it is done, it is taken care of.

Speaker 2:

Okay, it is absolutely imperative that everyone have power of attorney. If you can't come into the office, we do home visits. We do charge a little bit extra for that because it takes time out of our day, but we can do that, okay. So just remember powers of attorney, protect your control, avoid guardianship and make make life easier for you and, honestly, for your loved ones. They are a vital part of any estate plan. All right, thank you all for listening. I encourage you to forward this to someone who has not done their power of attorney and if you have not done it, please call the office 479-601-4119. Or you can go to generationslegalgroupcom and there is a schedule button there and there's a lot of information on everything we do at the office. We would be honored to be your attorney and please join us next time for more estate planning and Medicaid information. Okay, thank you all very much.

Speaker 1:

And that's a wrap for today's episode of Answers on Aging. Thank you for joining us on this journey of discovery and understanding. For more resources, detailed show notes and expert advice on the many facets of aging, don't forget to visit our website at wwwanswersonagingpodcastcom. Remember, growing older might be inevitable, but doing it with grace, knowledge and empowerment is a choice. Until next time, stay informed and keep those questions coming.