Power of attorney: why it is indispensable and how to implement it correctly

In a world where unforeseeable events are omnipresent, the importance of solid precaution is becoming ever clearer. Especially in old age, in the event of illness or sudden emergencies, it is essential to make legal regulations at an early stage in order to enforce your own wishes. But many people are reluctant to take an active approach to this issue and underestimate the consequences ofthe lack of a power of attorney. This article would like to show why a power of attorney is so important, what risks exist without them, and how to make them sensibly and legally secure in order to be well prepared in an emergency.

The initial situation: A stroke of fate and its consequences

A few years ago I met Michael – a man whose life changed fundamentally due to a tragic accident. He was still young at the time, but his story shows, as an example, why preventive measures are so indispensable. Two years before our meeting, a serious motorcycle accident occurred in which Michael’s father was seriously injured. His mother was alsoinvolved, but she suffered the most serious injuries. While Michael’s father got away with several fractures and minor injuries, his mother was permanently dependent on care after the accident. She was tied to the wheelchair and her mental abilities were severely restricted – she was barely able to act independently.

Coping with the tragedy: A man between care and hope

When I met Michael, his attitude was impressive. Despite the heavy stroke of fate, he described in a calm voice how he made his wife’s small progress visible. He reported on the long hours he devoted to daily care to do justice to her dignity and well-being. He also spoke of how he changed his professional lifeto have more time for the children, to keep the family together and to master everyday life as best as possible. What was particularly admirable was that he did not fall into self-pity or let fate suppress him, but always tried to achieve the best for his wife, the children and himself. His attitude was characterized by a deep sense of responsibility, oneunwavering love and admirable resilience.

The financial security: luck in misfortune

Thanks to good family financial security, money was not the biggest concern. Michael and his wife had taken precautions: Accident insurance had paid out considerable sums – almost a seven-figure sum – and monthly pension payments. This secured the financial basis for the care of the family and there was no acute lack of money. butDespite this security, there was a big hurdle that the two had overlooked: They had failed to legally authorize each other.

The problem: no power of attorney, no ability to act in an emergency

They had never granted a power of attorney – neither out of distrust nor from reservations, but simply because they had never considered it necessary. As a result, Michael was not allowed to act for his wife in the worst case. For every major issue – be it the purchase of an expensive wheelchair or financing a car – he had to have a court beforehandAppointed supervisor and have it approved. This meant that he had to obtain a permit for every single step and meticulously document everything.

Bureaucracy and its pitfalls in capital investments

It was particularly difficult when financial decisions that were associated with investments. Michael wanted to buy a property – such as a barrier-free apartment for personal use or an investment – a case attendant had to be appointed. This meant that all concerns had to be formulated before the purchase and all formalities had to be clarified. This led tothat the available objects had often long since disappeared from the market before the formal hurdles were overcome. The bureaucratic effort dragged on endlessly, which Michael only felt as a further burden. Looking back, it is clear why a conservative and secure investment strategy was hardly enforceable. The supervisor who should actually represent the interests of Michael’s wife,could only act to a very limited extent. For him, only safe investments such as cash or fixed deposits were conceivable – which ultimately led to a real loss of value in the event of inflation. The supervisor indirectly made sure that Michael’s wife’s supply situation was permanently deteriorated.

The everyday life of a career supervisor: standardization instead of individuality

This example shows how the system of care works in practice. A professional supervisor is usually responsible for numerous cases at the same time. There is often a kind of standard solution that leaves little room for individual needs. The goal is usually to have as little work as possible and to secure your own position. This means, in case of doubt, to reject decisionsso as not to bear any responsibility later. It’s a kind of bureaucracy that often loses sight of the individual. For Michael, who lovingly cared for his wife, this attitude was hardly understandable. For the supervisor he was just one of many cases, and the decision as to whether an investment would make sense was mostly made on the basis of formalities, not the basis of theindividual needs.

The problem in today’s practice: the lack of power of attorney

In today’s time, the lack of power of attorney is the typical blind spot in the wealth planning of many people. Many hardly know the problem or believe that their marital or family affiliation is sufficient to be able to make the necessary decisions in an emergency. But that is often a fallacy. It is understandable that most people are reluctant to deal with theirown death, possible illnesses or accidents. The topic is often postponed, similar to cancer screening, which you post regularly. Especially with age, the probability of eventually becoming demented and losing one’s own decision-making ability increases massively. From the age of 80, the rate of dementia is over 15 percent,Over 85-year-olds even at more than 25 percent. This means that a significant proportion of the old age population is no longer able to make legal and financial decisions independently.

The little impetus: why many act late

Sometimes you just need a little kick or a good conversation to bridge the gap between knowledge and action. But when it comes to sensitive issues such as accidents, death or serious illness, we are often just as inexperienced as with questions about finances. So who should draw our attention to these topics? Who should come up to us without doubt to point out things that we oftenprefer to repress? And who should regularly ask whether we have already implemented our precautionary measures? Many people think of lawyers or notaries, but these are usually not proactive. Even the insurance broker who actually provides protection or the bank advisor who manages our finances are rarely the right contact persons for health care powers.It is hard to imagine that someone trained to sell products will take an active care of this topic.

The most important thing: what a power of attorney can do

In fact, the topic is not as complex as it appears at first glance. A power of attorney essentially consists of two parts: a medical and a legal-financial section. For the medical field, you can authorize a person who makes decisions about the treatment in the event of illness. A living will alsobe deposited that sets your own will in advance. In the legal and financial area, you authorize the person to read your post and e-mails, to answer them legally and to represent them to authorities or courts. It can conclude leases, decide on their whereabouts and regulate all assets – from investments toTransfers to access to a safe.

Boundaries and risks: What the power of attorney cannot afford

With the medical power of attorney, you can determine whether your authorized representative can also make decisions about life-prolonging measures, for example in the case of artificial nutrition. You can also authorize him to refuse certain treatments, even if that could lead to death. If the design is appropriate, the power of attorney can even include that the authorized representativemay instruct a psychiatry or administer medication. That sounds frightening, and no wonder many are shying away from it. I took a deep breath myself when the notary read the last point to me and looked deep into my eyes. But in an emergency, someone else will have to make these decisions for you. It’s up to you to determine who that is- a familiar person, a family member or a court-appointed caregiver.

Decision support and flexibility in design

Three things can make it easier for you to create a power of attorney: First, you can explicitly object to certain decisions, such as compulsory admission to psychiatry or the taking of loans. Second, you can authorize different people for different tasks, such as your partner for medical decisions, another person you trustfor wealth issues. Third, you don’t have to commit forever. If the relationship of trust changes or the authorized person is no longer able, you can revoke the power of attorney at any time. If you are still not quite comfortable with the power of attorney, you have the option of filing a so-called guardianship order. With this you canappointed by the court as a supervisor in the event of their incapacity to act. Personally, I wouldn’t put any obstacles in the way of someone I trust – but a custodial order is definitely a useful addition.

Implementation: How to create legal certainty

The most important step is choosing a suitable authorized representative. Trust is of course essential, but other aspects also play a role: is the person able to take on the tasks permanently? Are your own children already of legal age and reliable? Or is your best friend perhaps too busy or unreliable? In the event of an emergency, it is also advisable toto designate a substitute authorized representative. Medical decision-making skills should also be well thought out. The authorized representative must be able to make clear decisions in an emergency, such as denying life-prolonging measures. This is a great responsibility that needs to be well prepared. It is helpful to explain in advance why you have certain regulationsmet to avoid later disputes. If everything is clarified, you should fix the power of attorney in writing. The Federal Ministry of Justice’s standard form is a simple, inexpensive solution. It is advisable to have the signature notarized in order to avoid subsequent disputes. You should also have separate powers of attorney at your bankdeposit so that it is capable of acting in an emergency.

Securing real estate, company shares and other assets

If you own real estate, a notary is also required. Because real estate transactions, loans or encumbrances in the land register can only be validly carried out with a notarial notarisation. This also applies to company shares or other assets that are registered in the commercial register. Personally, I advise always to involve a notary, as the consequencesare profound.

Precautionary power of attorney creates security and inner peace

In summary, a preventive power of attorney is not a complicated construct, but a meaningful protection in the event of an emergency. It ensures that your own wishes can be implemented even if you are no longer able to do so yourself. It creates inner security, preserves dignity in old age and can prevent disputes within the family. It is important that theto choose the right people, to arrange everything carefully and to record everything in writing.

Ultimately, it is about securing yourself early in the event of an emergency – so that not only your own wishes are respected in an emergency, but also family coexistence is preserved. A well thought-out power of attorney is an investment in your own safety and theinner peace. It provides orientation and protects against unnecessary suffering – for yourself and the people close to you.