excerpted from non-traditional family attorney Chris Tymchuck

If you are incapacitated there are two main areas in which you need someone else to have the right to speak for you: 1) financial matters and 2) medical decisions. This post will address the first area - financial matters - by explaining how you can allow another to conduct financial matters on your behalf through the use of a Power of Attorney (POA). See more on how to create a Health Care Directive in other posts on my Unique Estate Law website.

What is a power of attorney?

A POA grants another the authority to act on your behalf as if they were you. The person that you appoint as your agent in the POA essentially stands in your shoes. You may grant your agent the power to handle almost any financial matter on your behalf.

Why do you need a power of attorney?

Without the ability to instruct financial institutions on how to handle your assets and liabilities, you will not be able to apply for disability or pay your mortgage, health insurance, credit card bills or taxes. And no one else has the automatic right to handle these matters for you unless they either 1) incur the time, expense and hassle of going to court to seek the right to act for you; or 2) are appointed as your agent in a POA.

The Conservatorship Process

The primary purpose of incapacity planning is to avoid the court-controlled conservatorship process. It can be a lengthy and expensive process - at a stressful and confusing time - for your best friend, or unmarried partner, to obtain judicial approval to handle your financial matters.

Avoiding the Conservatorship Process with a Power of Attorney

The agent you appoint in your POA generally has the immediate right to act on your behalf. While a POA is important for nontraditional couples, it can be critical for single parents who do not live with a partner or have another "legal backup" to handle matters on behalf of them or their children.

In the face of uncertainty, the court will generally err on the conservative side by granting authority to someone related by blood or marriage. So, protect yourself - and your minor children - by executing a valid POA to appoint an agent to handle your financial matters at a time when you will be most vulnerable.

Chris Tymchuck is a Minnesota-based attorney. In this subsequent post on her website, she writes about the legal aspects of creating a POA in Minnesota.