A 2017 Wills and Estate Planning Study by Caring.com indicates that only 53% of American adults have a health care power of attorney. Establishing a power of attorney (POA) is an important estate planning step that allows you to appoint a person of your choosing to have the legal authority to act on your behalf for financial and legal matters after your death or sudden incapacitation.
If you would like to know more about how the estate planning process works or need assistance with choosing a power of attorney, you should consider consulting with an experienced Tennessee estate planning attorney for reliable legal guidance. With more than 40 years of combined legal experience, our knowledgeable team of attorneys at McCarter | East PLLC can help you explore all of your estate planning options and provide guidance that can help you navigate key decisions when choosing your power of attorney.
Our firm, McCarter | East PLLC, proudly serves clients throughout Murfreesboro and Berry Hill, Tennessee — so call today to get the assistance you need.
What is a Power of Attorney?
As we mentioned above, a power of attorney can be described as a legal document that gives an individual (the agent or attorney-in-fact) the legal authority, duty, and power to act on someone else's behalf (the principal) in legal, financial, and healthcare matters. Through the power of attorney document, the principal can assign an agent to sign documents on their behalf and manage any legal and financial matters.
According to Tennessee Code section 34-6-102,
"A durable power of attorney is a power of attorney by which a principal designates another as the principal's attorney in fact in writing and the writing contains the words "This power of attorney shall not be affected by subsequent disability or incapacity of the principal," or "This power of attorney shall become effective upon the disability or incapacity of the principal," or similar words showing the intent of the principal that the authority conferred shall be exercisable, notwithstanding the principal's subsequent disability or incapacity.”
Understanding The Different Powers of Attorney
In the state of Tennessee, there are five different types of powers of attorney that allow you to provide an individual of your choosing with certain rights in the event of your death or sudden incapacitation. These five different types include the following:
Tennessee Durable Power of Attorney
A durable power of attorney allows the agent to act on the principal's behalf when the principal becomes incapacitated. It includes a clause that maintains the power of attorney only after sudden incapacitation and will terminate upon the principal's death.
Tennessee General Power of Attorney
A general power of attorney gives the agent the legal authority to act on the principal's behalf in a variety of different matters, such as managing bank transactions, personal finances, opening financial accounts, purchasing and selling property, entering contracts, and paying bills. However, a general power of attorney terminates upon sudden incapacitation, when the principal dies, or the principal revokes it.
Tennessee Medical Power of Attorney
A medical power of attorney (or advanced healthcare directives) allows the principal to name an agent who will make healthcare decisions for them when they're unable to do so. Your agent can choose your medical treatment, surgical procedures, health care facilities to be treated at, artificial hydration and nutrition, organ donation, and other important healthcare decisions.
Tennessee Limited Power of Attorney
A limited or special power of attorney gives the agent the authority to act on the principal's behalf only on specific matters. For instance, a limited power of attorney allows the agent to cash a check, sell your property, or sign a deed to a property when you're unavailable. It will expire upon completion of the specific task that is outlined in the document.
Tennessee Springing Durable Power of Attorney
A springing durable power of attorney will go into effect and allow the agent to act on the principal's behalf when certain conditions are met or events occur. For instance, you can draft the springing power of attorney to go into effect when you're deployed overseas or when you become incapacitated.
Legal Requirements for
Durable Power of Attorney
Under Tennessee law, for a durable power of attorney to be valid, it must meet the following criteria:
Why Is a Power of Attorney Important?
In Tennessee, a power of attorney is important because it:
Grants authority to a trusted person to help manage your financial and legal affairs.
Eliminates the need for the court to appoint a guardian or conservator.
Provides privacy for you and your family members regarding financial matters.
Allows you to discuss your true desires and wishes with your loved ones.
Saves precious time and money when you need to execute an urgent task or make critical decisions and the principal is unavailable or unable.
Prevent any possible questions or discrepancies about the principal's intent or wishes.
Allows the agent to consult with other agencies to obtain information or provide services to the principal.
Helps you and your loved ones achieve peace of mind.
Important Factors to Consider
When Choosing a Power of Attorney
In case you are planning to choose a power of attorney, you may need to consider these factors:
The existing relationship between you and the person you intend to designate as your power of attorney
How dependable and trustworthy this person is
Does this person know your wishes or have your best interests at heart?
Proximity — how close this person is to where you reside
Will this person make your needs and wishes a priority?
Does it make sense to allow a beneficiary of your estate to manage your financial matter?
This person's ability to make informed decisions under potentially strenuous circumstances.
Is this person willing to take on this responsibility?
Work With an Experienced Attorney Today
Selecting a power of attorney involves more than simply choosing someone close to you. We advise all of our clients to choose a person that they believe has their best interests at heart and can represent their wishes and make informed decisions on their behalf. If you or someone you know is considering establishing a power of attorney, it is imperative that you speak with an experienced estate planning attorney for detailed guidance.
At McCarter | East PLLC, our knowledgeable attorneys can offer you the experienced legal guidance and strong advocacy you need when creating a strategic estate plan, including assistance with wills, trusts, powers of attorney, and advanced care directives. Our experienced attorneys will guide you through the entire legal process and make certain that you choose the right person to represent your desires, best interests, and true wishes. We will also work diligently to address all of your needs and concerns in an effort to help you outline a plan that can provide a better future for you and your loved ones. Call or reach out to our firm today to learn more.