Minnesota residents may believe that the estate planning process only includes preparations for the distribution of assets after death; however, one of the most important aspects of the process addresses what will happen to those who become incapacitated or unable to make their own decisions. Even though the document is called a power of attorney and the person to whom the authority is granted is called an attorney-in-fact, those who are appointed as such are not required to be lawyers.

A power of attorney (POA) allows people to designate others to act on their behalf when they no longer can. The person who grants the POA is called the principal, and that individual can choose what powers they wish to give. Also, a POA may be exercised for one instance or over an extended period.

Once a POA is granted, the attorney-in-fact can sometimes begin executing his duties even though the principal may intend otherwise. A durable POA becomes effective once it is signed and a springing POA does not become effective until the principal reaches incapacity. However, a springing POA can be challenging to enact. For example, some attorneys may advise their clients to have two physicians certify that the individual has become incapacitated. Unfortunately, certain financial institutions may not accept the doctors’ signatures or may require further certification; therefore, principals could benefit from selecting attorneys-in-fact upon whom they trust.

Planning for potential incapacity is an unpleasant but necessary part of the estate planning process. Principals need to choose their attorneys-in-fact wisely because they are the ones who may eventually be making important decisions on their behalf. People may find the planning process confusing; however, those who consult an estate planning attorney may find they receive valuable information.