What you need to know about powers of attorney

When you think about estate planning, you probably picture figuring how to distribute your assets to loved ones. While this is a critical part of the estate planning process that you need to thoroughly address, it’s not the only piece of your estate plan that needs attention. In this post, we want to take a closer look at a power of attorney so that you have a better understanding of what it is and what it can do for you in the context of your estate plan.

What is a power of attorney?

A power of attorney is a legal document that gives another individual the power to act in your stead, typically when you’re incapacitated and thus unable to make those decisions on your own. A power of attorney can delegate decision-making as it pertains to financial or medical matters, and that power can be broadly given or narrowly tailored to suit your needs. A power of attorney, then, can be a crucial piece of your estate plan, ensuring that your financial and health care decisions are made in a way that align with your wishes, even when you’re unable to make those decisions for yourself.

Key considerations when creating a power of attorney

On its face, the delegation of decision-making power contained in a power of attorney seems straightforward. But there are key considerations that you’ll want to take into account when creating one of these documents. This includes:

• Appointing someone you trust: Given the seriousness of these decisions, it’s imperative that you appoint someone you trust to act on your behalf in the event that you become incapacitated. This person should understand your wishes when it comes to healthcare and financial matters, and you should trust them to do what’s best for you, even when they’re faced with opposition.
• Being “fair” can complicate matters: If you have children, you might be tempted to appoint all of them to act on your behalf, that way the responsibility is evenly shared, and your children are treated equally. But this can really complicate matters. After all, your children may not see eye-to-eye, which could delay key decisions.
• An executor has nothing to do with a power of attorney: Some people make the mistake of thinking that an executor named in a will covers the duties found in a power of attorney. But an executor only manages your estate after you pass away. Therefore, you’ll need a separate individual to act on your behalf if you become incapacitated. This will require a power of attorney.
• A power of attorney is revocable: If at some point you find that a power of attorney is no longer necessary, or you want to change who will act on your behalf in the event of incapacitation, then you can do so if you have the capacity to modify relevant documentation. This holds true even if you were once incapacitated but have since recovered.

Craft the thorough estate plan necessary to suit your needs

You need a strong estate plan to protect your loved ones and your interests. This includes crafting effective powers of attorney as needed.

We know that navigating the estate planning process can be complicated, especially if you don’t know what the process entails, but you shouldn’t let your hesitations lead to prolonged procrastination. Instead, find a way to secure support, alleviate your fears, and get to work on developing the estate plan that you want.