“What Happens If You Don’t Have a Power of Attorney?” by Attorney Nicole Livingston (Audio)
An qualified estate planning attorney can help you to create a legally valid power of attorney as part of a comprehensive incapacity plan. Making a power of attorney is important to protect yourself in case you develop a serious illness or suffer an emergency injury and you are not able to make your own decisions or manage your own affairs any more as a result of what has happened. A valid power of attorney will also protect your family. 
A power of attorney must be created before something happens to you, while you are still of sound mind. If it is too late, then you and your family will face serious undesirable consequences.
A power of attorney is a versatile legal tool. It can be created to give someone limited authority to act on your behalf in a legal capacity. If you’re going to be out of town when a contract must be signed, you can create a power of attorney and give another person the authority to sign the contract just as if that person was you.
You can also make a general power of attorney, which is the type that is used in incapacity planning. If you make a general power of attorney, or POA for short, you get to name an agent or attorney in fact and give that individual broad authority to manage all of your decision-making when something happens to you and you are no longer able to communicate your preferences.
There are different kinds of general POAs you can make. You could make a springing power of attorney, for example, so the person you select as your agent won’t get authority until something happens to you. You could also make a healthcare power of attorney to name a person who will make your medical choices for you. You could name your healthcare proxy to be the same person as your attorney in fact who manages your other affairs or could choose a different person.
Whatever you do, you want your POA to be durable, so it stays in effect in case of incapacity, and you want it to follow all legal formalities so it is valid and enforceable.
If you fail to make a power of attorney before something happens to you, your loved ones are not going to know right away who should be in charge of making you decisions and there may be no one with legal authority to act on your behalf.
Your family could fight over who will be in charge of your affairs. There could be a long delay with no one in charge of making decisions, during which time your estate assets lose value because no one is managing them in an appropriate and careful way. Eventually, your loved ones will need to go to court and pursue guardianship proceedings, which is a stressful and costly process in which the court declares you are incapacitated and appoints a guardian.
Your appointed guardian may not be someone you would have chosen and may not be someone you think is actually going to be capable of managing assets in the smartest way possible. Unfortunately, it will be too late for you to do anything about it.
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