Nobody expects to become incapacitated. A sudden accident, a stroke, a serious illness, or the gradual onset of dementia can leave anyone unable to manage their own affairs. When this happens, the presence or absence of a power of attorney makes an enormous difference in how quickly and effectively your affairs are handled. Without one, your family faces a difficult, expensive, and emotionally draining road ahead.
The Immediate Crisis
When someone becomes incapacitated without a power of attorney in place, the impact is felt almost immediately.
Bills stop getting paid. Your mortgage, rent, utilities, insurance premiums, and other obligations do not pause because you are in the hospital or unable to manage them. Without a designated agent, there may be no one with the legal authority to access your bank account and make these payments. Missed payments can lead to late fees, service disconnections, insurance lapses, and even foreclosure.
Bank accounts become inaccessible. Even your spouse may not be able to access your individual bank accounts, investment accounts, or retirement funds without legal authorization. Joint accounts may still be accessible, but any accounts in your name alone are effectively frozen until someone obtains court-ordered authority.
Medical decisions are in limbo. Without a medical power of attorney, healthcare providers may not know who has the authority to make treatment decisions for you. While many states have default surrogate consent laws that establish a hierarchy of family members who can make decisions, these default provisions do not always work smoothly, especially in blended families, when family members disagree, or in emergency situations requiring quick decisions.
Business operations stall. If you are a business owner, your business may grind to a halt. Nobody can sign contracts, authorize payments, manage employees, or make critical decisions without legal authority. For small businesses dependent on the owner, this can be devastating.
The Guardianship Process
When no power of attorney exists, the only way for someone to gain legal authority over an incapacitated person's affairs is through a court-appointed guardianship (called conservatorship in some states). This process is fundamentally different from a power of attorney in almost every way, and not for the better.
Filing the Petition
The process begins when a family member, friend, or other interested party files a petition with the court, asking for the authority to manage the incapacitated person's affairs. The petition must include evidence of the person's incapacity, typically in the form of medical evaluations or physician statements.
Court Investigation
The court typically appoints an attorney or guardian ad litem to represent the interests of the allegedly incapacitated person. This appointed representative investigates the situation, interviews the person, reviews medical evidence, and makes a recommendation to the court. Some courts also appoint a court visitor or investigator to assess the situation independently.
The Hearing
A hearing is held where the judge considers all the evidence and testimony. The alleged incapacitated person has the right to attend, be represented by counsel, and present their own evidence. Family members and other interested parties may testify, and disagreements among family members can turn the hearing into a contested proceeding.
The Outcome
If the court determines that the person is incapacitated and guardianship is necessary, it appoints a guardian and defines the scope of their authority. The guardian may be a family member, but the court is not required to choose the person that the family prefers. In contested cases or situations where the court has concerns, it may appoint a professional guardian instead.
The Costs of Not Having a POA
The financial costs of the guardianship process are significant and ongoing.
Legal fees. Attorney fees for the petitioner can range from several thousand to tens of thousands of dollars, depending on the complexity of the case and whether it is contested. If the court appoints an attorney for the incapacitated person, that fee is also typically paid from the incapacitated person's estate.
Court costs. Filing fees, service of process fees, and other court costs add up.
Medical evaluation costs. The cost of physician evaluations and expert testimony needed to establish incapacity can be substantial.
Ongoing costs. Once a guardian is appointed, they must typically file annual reports with the court, which may require the assistance of an attorney or accountant. If a professional guardian is appointed, their ongoing fees can be considerable.
Opportunity costs. During the weeks or months that the guardianship process takes, bills go unpaid, investment opportunities are missed, business operations suffer, and the family's time and energy are consumed by legal proceedings.
The Emotional Toll
Beyond the financial costs, the absence of a power of attorney takes a heavy emotional toll on families.
Family conflict. When there is no designated agent, family members may disagree about who should serve as guardian, what decisions should be made, and how the incapacitated person's affairs should be managed. These disagreements can escalate into bitter legal disputes that damage family relationships for years.
Stress and uncertainty. The guardianship process is inherently stressful. Family members must navigate an unfamiliar legal system while simultaneously dealing with the emotional impact of a loved one's incapacity. The uncertainty about the outcome adds another layer of anxiety.
Loss of dignity. Guardianship proceedings involve a formal judicial finding that a person is incapacitated, which can feel demeaning and dehumanizing. The process is public, meaning private financial and medical details become part of the court record. For the incapacitated person, if they have any awareness of the proceedings, the experience can be deeply distressing.
Guilt. Adult children who must seek guardianship over a parent often experience significant guilt, feeling that they are taking away their parent's independence and autonomy. This guilt can be compounded if the parent resists the guardianship or expresses opposition.
Common Misconceptions
Several misconceptions lead people to delay creating a power of attorney.
"My spouse can handle everything." This is not always true. While spouses can often manage joint accounts and shared assets, individual accounts, certain types of property, and many financial transactions require specific legal authority that a spouse does not automatically have.
"My kids will figure it out." Without legal authority, your children cannot access your accounts, make medical decisions, or manage your affairs, no matter how willing they are to help. They will need to go through the guardianship process first.
"I am too young to need a POA." Incapacity can happen at any age. Car accidents, sports injuries, sudden illnesses, and other unexpected events can leave anyone unable to manage their own affairs. Age is not a prerequisite for needing a power of attorney.
"I can do this later." The window for creating a power of attorney closes when you lose mental capacity. Once that happens, the option is no longer available. The best time to create a POA is before you need it.
The Simple Solution
The consequences of not having a power of attorney are severe, but the solution is straightforward. Creating a durable power of attorney while you are still competent ensures that someone you trust can step in immediately if you become incapacitated, without court involvement, without delays, and without the emotional and financial costs of guardianship.
The process of creating a POA is relatively quick and inexpensive, especially compared to the alternative. It is one of the most important legal steps any adult can take.
mypoa.ai can help you create a comprehensive power of attorney tailored to your state's requirements. Do not wait until a crisis forces your family into the guardianship system. After generating your documents, follow the execution instructions included with your download to ensure proper signing, witnessing, and notarization.