While a will is a good starting place for your estate plan, a strong plan will utilize many other tools to determine what will happen to your assets after you pass away, or what will happen if you become ill or incapacitated before that time. Today we’re highlighting one of the most useful estate planning tools under the sun: the power of attorney.
What would happen if you were alive, but unable to express your desires? How would your finances be handled? What about your medical care? With a power of attorney (POA), you can make sure your wishes are respected and someone you trust represents you in these scenarios.
A power of attorney is a legal document through which you can grant someone you trust the authority to act on your behalf. The person who creates a power of attorney is referred to as a “principal” in this arrangement, while the person they give the authority to is called their “agent.” You can use different types of powers of attorney to grant your agent the level of control you want over the matters you choose.
General Power of Attorney: This type of POA is used to give your agent control over almost all of your decisions and legal affairs, including financial matters. All POA agents are fiduciaries in the eyes of the law, meaning they must act in the best interest of the principal. Your attorney can help you pick and choose how much or how little authority you give your agent through a general power of attorney.
Health Care Power of Attorney: Many people designate a different agent for medical matters by creating a specific POA for health care. The person you want to handle the financial side of things isn’t always the same person you want to entrust with your medical decisions. A health care POA, also known as a health care designation, grants an agent the authority to communicate with your doctors and decide how your treatment should proceed when you are ill or injured. It is wise to create a Living Will at the same time that you create your health care power of attorney so that your agent will know the nature of your wishes regarding end of life care.
Limited Power of Attorney: If you want to grant someone legal decision making-authority for a limited and very specific matter, you can use a POA. This could be useful if, for instance, you wanted a family member to stand in for you in selling a piece of real estate while you are travelling abroad. These POAs have a narrow scope.
If you make any of the above POAs “durable,” it will mean that the agent will maintain their authority even if you become incapacitated. POAs that are not durable become invalid if you are in a coma, suffering from late-stage Alzheimer’s, or otherwise incapacitated, often defeating their intended purpose. Make sure you pay attention to whether or not your POA is durable.
At Carroll Law Office, we have experience helping clients secure their legacies and ensure their wishes will be respected in the future through estate planning. Contact the Carroll Law Office to start planning ahead. We can’t wait to work with you!
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