Three Ways to Empowerment
When clients make appointments for “estate planning”, they tend to be focused on how they leave their property when they pass away. While this is, of course very important, we always stress that an estate plan is incomplete without properly drafted “powers of attorney.”
A power of attorney is a legal document where you grant powers to make decisions for you under circumstances you dictate. These powers include making financial decisions, paying bills, executing deeds or making medical decisions. These powers can be effective immediately or upon disability. What powers and when they can be used depends on your individual personal circumstances.
Generally speaking, there are three types of powers of attorney, and each functions in a slightly different way.
- A durable power of attorney is commonly used to allow the holder to make healthcare or financial decisions when a person lacks capacity to make her own decisions.
- A general power of attorney gives the holder broad powers to make business, medical, financial or legal decisions for another.
- A special power of attorney only gives the agent power to make decisions in a specific area, like a particular business interest.
Along with the powers, who you name to act for you — the “agent” — is of key concern. Often spouses act for each other, or adult children act for their parents. The main thought is that the person should be a trusted individual or professional fiduciary.
A power of attorney terminates when you revoke it, or a specific task designated by it is complete, or when you die. Powers of attorney are valid in every state.
Please contact us regarding your estate planning needs, including the proper drafting of a power of attorney.