A power of attorney (POA) is an estate planning tool in Wisconsin where you appoint a person, known as the agent, to manage your affairs. Typically, the POA is appointed to manage financial or medical matters when you cannot do so yourself because you are incapacitated by illness or injury.
People are often confused, however, as to when and which type of POA is needed. At Krajnek Law Office, as your estate planning attorney in Manitowoc, I will listen to your concerns and needs, review your estate, and advise you on which POA is best for you and your unique situation. Contact me at 920-769-5027 to schedule a free initial consultation and learn more about how and why a POA can complement your estate plan.
What Constitutes a Power of Attorney in Wisconsin?
A power of attorney is the legal authorization for one person, the agent, to act on behalf of another person, the principal. Often called a letter of attorney or just a "POA", they are a common element of estate planning as they let a person who is losing their ability to manage their own affairs choose someone they trust to make decisions for them.
There are six types of POAs, described below.
1. Durable POA
A durable POA takes effect immediately upon your signature unless the POA states otherwise and allows your agent to continue acting on your behalf even when you are incapacitated. A durable POA terminates only when you die or when a revocation of a POA form is issued.
2. Non-durable POA
A non-durable POA takes effect immediately upon your signature unless the POA states otherwise. It does not allow your agent to continue acting on your behalf when you become incapacitated. In the latter scenario, only a court-appointed guardian or conservator can make decisions on your behalf.
3. Medical POA
A medical POA is sometimes referred to as an advance directive because it allows you to appoint a healthcare agent to make medical decisions for you when you cannot do so. It is limited by your specific medical preferences and any other directive you may have as part of your estate plan, like a living will or a Do Not Resuscitate (DNR) form.
4. Financial POA
A general POA allocates broad powers to the agent to act on financial, business, real estate, and legal matters. This POA is limited only by the terms set out in the POA or by any relevant state statute.
5. Limited (Special) POA
A limited (Special) POA allows the agent to act for a specific purpose and once that purpose is accomplished, the POA expires.
When is a Power of Attorney Necessary in Wisconsin?
A power of attorney is a useful tool for people who are planning their estate but who are losing the ability to understand the repercussions of their decisions and actions. By giving an agent the power to make those decisions, a principal can rest assured that someone is taking care of them.
A POA is common in the following situations:
- The principal suffers from a worsening medical condition that impacts their mental capacity, like Alzheimer's or dementia
- The principal is physically disabled and cannot sign important documents
- The principal wants to give someone else the power to make specific decisions on their behalf
There are, of course, other reasons why you may need or want a power of attorney created. Speaking to an estate planning attorney in Wisconsin is the best way for you to identify and determine what will work best for you.
Challenges to a POA in Wisconsin
A family member or another close person is usually listed as the power of attorney. Sometimes, problems or conflict arises, leading to another family member disputing the POA. There are three possible ways to challenge a POA.
- The principal is mentally incompetent. The principal of the POA is the one who grants a power of attorney, and the principal gets to choose who that POA is. If a family member wants to revoke or contest the POA, then proving the principal was mentally incompetent (e.g., has dementia, a psychiatric issue, or another form of mental incapacity) is one way it might be done. This type of dispute is often determined by the winner of the battle of the experts.
- Formalities were not followed. POAs require a number of formalities, which vary by state. Failure to follow or satisfy the formalities can mean the POA is invalid. You want to look out for specific language that's required by state law, signature and witness requirements, and notarization requirements.
- Agent abused authority. Agents are the ones chosen by the principal to act as their POA. When an agent abuses this authority, a POA can be challenged. Examples of abuse include stealing the principal's assets, mismanaging assets, or neglecting the principal's needs altogether. This type of dispute can be difficult to prove because often it's a matter of he-said, she-said.
Having an attorney to help you with the POA is one way to help prevent disputes in the future.
Contact an Estate Planning Lawyer in Manitowoc Today
Powers of attorney are powerful tools to make sure your finances and other business or personal matters are properly managed while you are incapacitated or otherwise unable to oversee them yourself. You can speak to an estate planning attorney at Krajnek Law Office to discuss estate planning generally and powers of attorney as part of the estate plan specifically.
I always believe that my clients in Wisconsin make better choices for themselves and their loved ones when they are well-informed and adequately prepared. Contact me directly at 920-769-5027 or online today to schedule a free initial consultation.