If you’ve ever watched any law shows, you’ve probably heard the terms power of attorney and representation agreement used by one of the lawyers. But do you know what they are? Unless you’re studying law or have a vast vocabulary that includes law terms, you might not know what they mean, and that’s okay. That’s why we’re here to help you!
In this article, we will break down what these terms mean and why you should have them. We understand the importance of being educated on essential matters and being well-informed before making any decisions. We are here to help you!
What Is a Power of Attorney?
A power of attorney is a written legal document you can use to appoint someone to manage your affairs while you’re still alive. This person can be your parent, spouse, child, best friend, etc. To assign a power of attorney, you must be at least nineteen years old and be mentally capable of doing so. The law presumes you are mentally capable if you can understand the document you are signing unless it’s otherwise shown you’re not.
So if you previously thought power of attorney was like a will, you would be incorrect. A power of attorney is very different from a will. A power of attorney applies to your life, where a will applies to your death. Power of attorney manages your affairs where a will divides your assets once you’ve passed on.
The Different Types of Power of Attorney
There is more than one type of power of attorney you can have, each with specific criteria for it. Here are the three different types of power of attorney you can have:
- General Power of Attorney: This ends the moment you become mentally incapable or die.
- The Enduring Power of Attorney: This endures even if you become mentally unfit.
- Limited Power of Attorney: Primarily used by people who can’t look after their affairs due to injury or out of the country travel. Example: If you were in a car accident and cannot manage your bills or bank account, a limited power of attorney can help with that.
Why Have a Power of Attorney?
Now you’ve learned the definition of power of attorney, but now you might be wondering why it’s essential to have one. After all, you’re alive and reading this, so why would you need someone to take care of your affairs in your current state? There are several reasons why it’s a good idea to have a power of attorney.
The first reason is life is constantly changing, and so are we. One day we can be running a marathon or swimming across our backyard pool, the next day we could be in the hospital suffering from an injury or an illness. There is no guarantee that our mental and physical health will hold up as well as it does now in the next 5-10 years. So knowing that someone is there to take care of our affairs if we become ill or injured can help relieve some of that additional stress that comes with those two events.
The second reason is having someone who knows your wishes while you’re alive can help in specific scenarios, such as financial and legal matters. If you’re looking for them to make personal care or healthcare decisions for you, then that’s where you’ll need a representation agreement, which we will be covering in the next section of this article.
The third and final reason is that having someone to look after your affairs while you’re injured or traveling prevents you from having financial issues while you’re alive. Think about it- how many times have you missed a bill payment by a day or two and had major hassles trying to pay it late? Or how many times have you come home from vacation to find something wrong with your home? By having a power of attorney, you can avoid these stressful events from happening in the future, meaning you can relax with ease.
What is a Representation Agreement?
A representation agreement is similar to power of attorney, but with some crucial differences. A power of attorney only allows you to have someone make financial and legal decisions for you. A representation agreement allows someone to help you make personal and healthcare decisions. They can help you make these while you’re healthy or make them for you if you become unable to do so. However, a representation agreement does not give the authority for this person to authorize medical assistance in dying.
Just like with power of attorney, you need to be at least nineteen years old to have one made. You can choose to have one or more representatives under this agreement, and you can choose to give them the same authority or different authority in your personal and medical matters. The representative can be your spouse, child, other family members, or trusted friend, but they cannot be someone you’ve paid to provide you personal and healthcare services. So when choosing your representative, select someone you know has your best interests in mind and will do their best for you.
Why Have a Representation Agreement?
Now that you have a better understanding of what a representation agreement is, it’s important to understand why having one could benefit you in the future.
As we get older, it’s natural that our health will start to decline. Sadly for some people, that decline starts sooner due to significant illness, disease, heart issues, accidents, etc. And watching your health decline at a slow or rapid pace adds to the stresses we face dealing with everyday life. Stress negatively impacts the body, contributing to your declining health and making you feel mentally and physically worse.
By having a representation agreement, you can reduce the additional stress of falling ill or being in an accident. Having someone beside you to help you make those personal and healthcare decisions can give you peace of mind in knowing that no matter the outcome, you have someone taking care of your best interests. Also, by having this agreement, you have control over who gets a say in your personal and medical decisions. So if there’s someone you don’t want to have an opinion, like your ex-spouse, a sibling or parent, a child, etc., having this agreement makes it so they won’t have any input.
So if you’ve noticed a decline in your health or have recently received bad health news, now is the time to start thinking about having a representation agreement drawn up. Even if you’re the picture of perfect health right now, we recommend looking into getting a representation agreement for the sake of your current and future well-being.
Conclusion
We learned a lot today about the power of attorney, representation agreements, and the importance they have. If you don’t have either of these or have been on the fence about them, now is the time to consider putting them into place. Future you will be grateful to past you for planning ahead.
