Financial and Medical Power of Attorney

You can secure the future of your loved ones by preparing important documents now. There are three important documents to have prepared in the event of disability or incapacity: a will, a financial power of attorney and a medical power of attorney.

A financial power of attorney is a legal document that allows someone you trust to make important legal decisions and transactions at your direction. This person is called an agent. When you execute a power of attorney, you authorize your agent to perform legal acts that only you would be able to perform otherwise. 

A separate medical power of attorney is required for an agent to make medical decisions for you. A medical power of attorney is also an important document that you should have in place in the event that the unexpected occurs so that you are prepared.

A medical power of attorney allows someone you trust to make medical decisions on your behalf should you be under disability or incapacitated and unable to make those decisions yourself.

If you do not have a financial or medical power of attorney and an event occurs that causes you to be unable to make your own decisions or transactions, your family will not have the authority to appoint an agent for you and a court may have to decide who will have legal authority on your behalf. You know best who will handle your important decisions, so take steps to make the appointment now to take effect should you need assistance with your financial or medical affairs. You may decide one one agent for a financial power of attorney and another for a medical power of attorney.

Colorado requires specific authorization for certain financial powers and does not permit these powers to be assigned using general language. These are referred to as “hot powers.” For hot powers, the power of attorney must specifically authorize each power. Hot powers include an agent’s authority to create or modify trusts, give gifts, create or modify rights of survivorship, or modify beneficiary designations, such as those on an insurance policy. An attorney assisting you in preparing a financial power of attorney can review each type of power with you, and you can decide whether you would like to grant that specific power or not.

Colorado requires that a power of attorney be notarized and that the maker be mentally competent at the time of signing or the power of attorney will be invalid. A medical power of attorney is subject to the same legal requirements as financial powers of attorney. Although not required in Colorado, if you travel it is beneficial to also include the signatures of two witnesses on a medical power of attorney so that it will be valid in states that require two witness signatures.

Your agent is ethically and legally obligated to follow the direction that you provide, so you can limit their authority in any way. Their role as your agent is to carry out your direction and intent.

You can revoke a power of attorney at any time verbally or even better by preparing a written revocation. Your attorney can assist at any time you desire to prepare a revocation. If you do revoke a power of attorney, you should let anyone you know in possession of your power of attorney know about the revocation.

If you are looking for information or assistance with important life planning documents such as wills, powers of attorney or “living wills,” contact me at 720-709-4729 or at the online link.