Other situations where someone else may make decisions for a person include decision making regarding financial affairs. Many such situations involved advance planning. Trusts are a prime example of such preplanning designed to allow someone else to make financial decisions for a person. Often, the person who creates a trust (a trustor, or settlor) is also the initial trustee. Most trusts provide for some other person to take over the administration of the trust once the trustor or settlor becomes incompetent or dies, or even when the trustor or settlor simply decides that he or she no longer wishes to manage some or all of his or her own financial affairs.
Powers of Attorney
An even simpler (although less certain) mechanism which may allow someone else to handle a person’s affairs is a power of attorney. With a power of attorney a person (often called the principal) can appoint an agent, or an attorney in fact, to handle the person’s affairs. Powers of attorney can be very broad ranging, or they can be very narrow, allowing a person to grant wide powers, or restricting the powers granted to a very limited sphere such as the sale of a single asset.
Powers of attorney, and the powers they grant, die when the person who granted the power of attorney dies. Powers of attorney cannot be used to handle a person’s affairs after he or she has passed on.
There are some other restrictions to the powers granted by a power of attorney as well. Some of these restrictions apply even if the power of attorney says that it grants the attorney in fact the power to handle all of the person’s financial affairs and to do everything that the principal could do or could have done for himself or herself.
A well crafted power of attorney can sometimes widen the scope of a power of attorney by adding specific powers. There are some situations that cannot be handled by powers of attorney, but a skilled attorney can add considerably to the powers granted in some circumstances.
Please note, Guardianships and Conservatorships can also be ways of handling the affairs of someone who can no longer handle his or her own affairs. Guardianships and Conservatorships allow someone to handle the affairs of a person who did not create a trust or a power of attorney before becoming incompetent. For more information, please see the separate Guardianship and Conservatorship page on this website.
NOTE: The above are only some of the times that one can benefit from legal advice from a person who is well versed in elder law matters, guardianships and conservatorships, Advance Directives for Health Care, power of attorney issues, similar matters. The above should not be considered legal advice, nor should it be taken as a statement of the only time that one might benefit from consulting a legal or other professional.