When does a power of attorney go into effect?

Published By | Apr 21, 2023 | Estate Planning |

When someone creates a power of attorney, this effort grants another individual the ability to make decisions on their behalf under specific circumstances. These could be financial decisions, such as giving that person authority to make decisions on behalf of their small business. They could also be medical decisions, giving their agent the ability to tell their doctors what type of treatment they will and will not be subjected to.

A power of attorney designation is valid as soon as it has been legally executed by the party making the designation, but it doesn’t actually transfer power to a named agent at the time. Transfer of authority only occurs if the individual in question has become incapacitated or is otherwise unable to make their own decisions.

How is incapacitation defined?

It is not always easy to determine whether someone can make their own decisions or not. There are clear cases. For instance, maybe someone has a stroke and they are being kept alive in the hospital, but they are relatively unresponsive. Maybe they’re in a coma, such as a medically-induced coma designed to manage their symptoms. It’s clear that they’ve been incapacitated.

But what about someone who is struggling with a condition like dementia? At times, it may be clear that they can’t make their own decisions with their best interests in mind. At other times, they may be thinking clearly and demand that no one else make decisions for them.

In a situation like this, a psychological evaluation may be needed. A professional can carry out an evaluation and determine whether or not the individual in question still has the mental capacity to make their own choices and to advocate on behalf of their own interests. This may be necessary when there are disagreements between the person’s heirs or when the person themselves wants to retain control of their decisions, even though everyone else believes that their power of attorney should be in effect.

When things do get complicated, it’s quite important for all involved to understand exactly what legal options they have and what steps to take. Speaking with an attorney can provide this clarity.