Understanding Powers of Attorney in Indiana

A power of attorney is one of the most important estate planning tools available. Here is
how powers of attorney work in Indiana and why having them can help you avoid costly
litigation.

A power of attorney is a legal document that allows one person, known as the principal,
to authorize another person, known as the agent or attorney-in-fact, to act on the
principal’s behalf in legal, financial, or healthcare matters. Powers of attorney are core
parts of a person’s estate plan, and having them in place can help ensure that your
affairs are managed by someone you trust if you are unable to manage them yourself.

Indiana recognizes several types of powers of attorney. A financial power of attorney,
known as a general power of attorney, grants your agent the authority to handle
financial transactions on your behalf, including but not limited to managing bank
accounts, paying bills, filing tax returns, buying or selling property, and handling
business affairs. A healthcare power of attorney, or advance directive, allows your
named agent to make medical decisions for you if you are unable to make them
yourself. You may also limit the authorities of your agent by signing a limited power of
attorney, in which case, your agent would only be able to act in accordance with your
very specific instructions about certain transactions or during certain periods of time.

Under Indiana law, a power of attorney is presumed to be durable, meaning it remains
effective even if you, the principal, become incapacitated, unless specifically stated
otherwise within the document. This is one of its most important features because
incapacity is typically the situation in which a power of attorney is needed most. If you
are unable to manage your affairs due to illness, injury, or cognitive decline, your agent
can step in immediately without needing court approval. You may also create a power of
attorney that does not take effect until a specific triggering event occurs, such as a
physician certifying that you are incapacitated. This type of power of attorney is referred
to as a springing power of attorney.

One of the most significant benefits of having a power of attorney in place is that it can
help your family avoid the need to pursue a guardianship over you. Without a power of
attorney, if you become incapacitated, your family members may need to file a petition
with the court asking the court to appoint a guardian to manage your affairs.

Guardianship proceedings require legal filings, court hearings, and ongoing reporting to
the court, which can be both expensive and time-consuming. A properly drafted power
of attorney allows your chosen agent to act on your behalf without court involvement.
It is important to choose your agent carefully. The person you name should be someone
you trust to act in your best interests and to follow your wishes. Under Indiana law,
agents owe fiduciary duties to the principal, meaning they are legally required to act
honestly, in good faith, and in the principal’s best interest.

The attorneys at McNeelyLaw can help you prepare powers of attorney tailored to your
needs and circumstances. Contact us today to discuss your estate planning goals.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of
any specific facts or circumstances. The contents are intended for general informational
purposes only, and you are urged to consult your own lawyer on any specific legal questions
you may have concerning your situation.