Your estate plan should be carefully crafted so that all your needs are taken care of, and your family is protected should anything ever happen to you. More often than not, this means going beyond writing a will to include important legal instruments such as revocable trusts, healthcare directives, and the all-important Power of Attorney.
What is a Power of Attorney?
A Power of Attorney is a legal document that allows you to name another person (known as an attorney-in-fact or agent) to step in and handle specific affairs on your behalf. This person can be a friend, family member, or someone you trust, and a few examples of what they may do include signing checks, paying bills, and making informed decisions regarding healthcare.
General and Durable POAs.
A Power of Attorney can be either durable or general.
A General Power of Attorney is only valid until you become incapacitated. While that may sound strange, it really comes in handy if you want someone to help make decisions as you age. Military personnel may also use it if they expect to travel overseas for an extended period and need someone back home to handle important matters until they say otherwise.
A Durable Power of Attorney also grants your attorney-in-fact powers after you cannot make decisions for yourself. It endures pact incapacitation. Depending on your unique situation and how the POA is written, this can include certain end-of-life decisions.
What Are the Pros and Cons of a Power of Attorney?
One of the biggest benefits of a Power of Attorney is its flexibility. You can choose whomever you want to make decisions for you, and you can be as narrow or broad as you want in terms of the authority you assign someone. You can also make it effective immediately or kick in at some point in the future.
There are drawbacks to everything. Risk is the most obvious, in this case. You want to make sure that you trust the person whom you’re appointing as your power of attorney and that you revoke that power if that relationship changes.
Having a qualified estate planning attorney draft your Power of Attorney is the best course of action if you ever need one. Not only will they help you properly define the scope of authority, duration, and other important matters, but they can advise you on additional legal instruments that will cover you and your family for years to come.
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