Powers of attorney are very valuable documents, very valuable to an individual who might encounter, say, a health issue. If somebody has a health issue and they need assistance with checking accounts, or grocery shopping, or whatever it is they need help with, they can appoint a powers of attorney. You would appoint somebody you’re, what’s called, “attorney in fact” and your durable power of attorney says, “I hereby appoint so-and-so to be my attorney in fact.” They now have the authority to do things for you and that’s a very helpful thing to do. They can go to the bank and say, “I need to write a check on behalf of Mrs. Smith who has appointed me her power of attorney.” They have the authority to so and the bank honors checks that she might write, or that individual might write, for Mrs. Smith.
The reason we have powers of attorney is if you don’t have a power of attorney and you were, let’s say, to get in a car accident and need assistance, if you don’t have a power of attorney we would need to petition the probate court and have a guardianship appointed and a conservatorship appointed. A guardianship is through the probate court and is when an individual is appointed to oversee the health and wellbeing of the individual. The conservatorship may be the same person, it maybe somebody different, is responsible for overseeing the financial wellbeing of that individual. With a power of attorney you can avoid, again, the costs, and they are very costly, and difficulty associated with guardianships and conservatorships. That’s why we do durable powers of attorney for that very reason.
Banks don’t call the injured individual to confirm that they’ve appointed somebody power of attorney. They just rely on the document to say, “Oh, okay, looks as if you have authority to act on behalf of Mrs. Smith. I’m going to go ahead and honor your request that you’re going to write checks on her behalf.” For that reason, they can be subject to abuse, so I try to caution folks before they appoint someone a power of attorney. Be very careful about who you appoint, make sure you explain to them that if they abuse their trust, they could be subject to a felony, and that they’re only going to be doing that which is in your best interest. Thankfully, in my career I haven’t had a problem. I know having sat in probate court many, many times, I’ve heard of others who have. I try to be very, very upfront about that with people before we go into that, or put a durable power of attorney together.