Power of attorney is a legal document that gives someone else the authority to make decisions on your behalf. This person, known as the agent or attorney-in-fact, can manage your financial, legal or medical affairs if you cannot do so yourself.
Incorporating a power of attorney into your estate plan can ensure your affairs are in order, especially in unexpected situations.
Types of power of attorney
Understanding the different types of power of attorney helps in selecting the right one for your estate plan. A general power of attorney grants broad powers to your agent, covering various actions like managing finances or business transactions. This type is effective until you revoke it or become incapacitated.
A durable power of attorney is similar to a general POA but remains effective even if you lose the ability to make decisions yourself. This feature makes it particularly important for estate planning, as it ensures that someone can manage your affairs without court intervention.
A limited power of attorney restricts the agent’s power to specific activities or time periods, ideal for single transactions or events when you cannot be present.
A medical power of attorney authorizes your agent to make medical decisions on your behalf if you become unable to communicate your wishes.
Why power of attorney is important to your estate plan
Including a power of attorney in your estate plan offers several benefits. It ensures that someone you trust can handle your affairs if you are incapacitated, avoiding the need for court-appointed guardianship. This can save time, money and stress for your family.
A POA also allows you to specify who will make decisions about your health, finances and legal issues.
By incorporating a power of attorney into your estate plan, you can secure the management of your affairs and ensure that your needs are met, even if you cannot manage them yourself. This preparation helps protect your assets and provides clarity and direction for handling your matters in challenging times.