Many families focus their estate planning on trusts and wills—documents that primarily take effect after death. But what happens if you become incapacitated while still living? That’s where a power of attorney becomes essential.
What Is a Power of Attorney?
A power of attorney (POA) is a legal document that authorizes someone you trust—called your “agent” or “attorney-in-fact”—to make decisions on your behalf. There are several types:
- Financial Power of Attorney: Handles banking, investments, property, and financial decisions
- Healthcare Power of Attorney: Makes medical decisions when you cannot
- Durable Power of Attorney: Remains effective even if you become mentally incapacitated
Why Your Trust Isn’t Enough
Trusts are powerful tools, but they have limitations:
Trusts Only Control Trust Assets
Your trust only governs property that’s been transferred into it. Bank accounts, retirement accounts, and other assets outside the trust may still need someone to manage them—especially if you’re incapacitated.
Many Decisions Aren’t Financial
A trust doesn’t address healthcare decisions, living arrangements, or interactions with government agencies. Only a power of attorney (and healthcare directive) can authorize someone to act in these areas.
Court Intervention Without Proper Planning
If you become incapacitated without a durable power of attorney, your family may need to pursue a court-supervised guardianship or conservatorship. This process is:
- Expensive (often thousands of dollars in legal fees)
- Time-consuming (weeks or months to complete)
- Public (court records are accessible to anyone)
- Ongoing (may require annual accountings and court approval for major decisions)
Key Elements of an Effective Power of Attorney
Choose the Right Agent
Your agent should be someone you trust completely. Consider:
- Financial responsibility and judgment
- Availability to handle matters when needed
- Willingness to serve in this role
- Ability to make difficult decisions under pressure
Make It Durable
Oklahoma law requires specific language to make a power of attorney “durable”—meaning it remains effective if you become incapacitated. Without this language, the POA becomes useless exactly when you need it most.
Be Specific About Powers
A well-drafted POA clearly defines what your agent can and cannot do. This might include:
- Managing bank and investment accounts
- Buying, selling, or managing real estate
- Filing tax returns
- Making gifts (with appropriate limits)
- Managing business interests
Common Mistakes to Avoid
- Using outdated forms: Laws change; your documents should be current
- Not naming alternates: What if your first-choice agent can’t serve?
- Forgetting to update: Life changes (divorce, death, moving) require document updates
- Keeping it secret: Your agent should know they’ve been named and where to find the documents
A Complete Estate Plan
The most effective estate plans address both lifetime incapacity and what happens after death. At minimum, most Oklahoma families should have:
- A will (and often a trust)
- Durable financial power of attorney
- Healthcare power of attorney
- Living will / advance directive
These documents work together to ensure your wishes are followed and your family is protected—no matter what happens. Schedule a consultation to review your current plan or create one that covers all the bases.