- Posted by Clay Caldwell, CFP®
- On June 28, 2018
- estate plan, estate planning, POA, power of attorney
For most of us, we think about a Power of Attorney (POA) coming in to assist when a parent is approaching the end of their life. This document gives you the authority to make medical, legal, and financial decisions on your parent’s behalf when they are no longer capable of making these decisions on their own.
While this document is critical for aging parents, there is another important way that a POA can be used within your family: giving grandparents POA over your children if you are unable to make critical choices on your children’s behalf.
SIMPLIFYING BIG AND SMALL DECISIONS
Consider a simple example involving a school field trip. If you and your spouse are out of town, you may be unable to sign documents required to have your child attend the event. A POA agreement provides your parents with the ability to sign this document in your absence. This is a low-consequence example, and the POA agreement becomes more valuable as the decisions become more important.
Consider another example where your child has been in an accident and is in the hospital. What happens if doctors need direction on whether to perform surgery and you or your spouse cannot be reached? In many cases, an inability to contact the legal guardian can delay care, result in procedures which are not wanted, or both. The POA becomes critical here, as it gives a grandparent the ability to step in and make important decisions on your child’s behalf, when you cannot do so.
The most serious example of grandparents having to use a POA is if you are mentally or physically unable to make decisions for your child. This is a situation we hope you never encounter, but the POA arrangement can help streamline and simplify what is a very difficult situation for any family.
A SAFETY NET WHEN YOU NEED IT
For many parents, it can be easy to think that these things won’t happen to their family. The reality, however, is that these types of situations are much more common than you may realize and, just recently, a grandparent POA came in handy for one of our clients here at RAA. Our client was watching their grandkids for a few days while the parents went on a short vacation.
One evening, one of the young grandkids fell and bumped their head on the family’s coffee table while playing. While it looked like a minor cut, the grandparents took the child to the emergency room to be cautious. Since this family had the grandparent POA established, the grandparents were able to make simple care decisions on behalf of the grandchild that evening while the parents were out of cell phone service. Everything was fine in the end, but this highlights just one example of how a POA can be used.
SETTING UP THE POA
Not all POAs are created equal, and there are a number of constructs to choose between. Some POAs provide general legal power, some provide very specific decision-making ability, and some only come into effect following a specific event within your family. It’s also important to know that you can have multiple POAs in place for your children. One grandparent can make financial decisions while another grandparent makes medical decisions, for example.
There are many options to choose from and, as with any legal document, it’s critical to consult an attorney when establishing a POA within your family
We hope you never encounter a situation where a grandparent POA is needed, but our role is to identify risks within your life and address them. If you have questions about the POA process or would like to find out if a POA may make sense in your estate plan, request a complimentary estate planning review to discuss your options.