Estate Planning 101: The Powers of Attorney
April 20, 2019
One of the most important estate planning tools is known as the Power of Attorney. This is a tool where you are able to grant another individual or service with the authority to make decisions on your behalf if you are unable. This is very useful for protecting yourself and your estate from what could happen if you are incapacitated for an extended period of time. It can even be set up so the person who is given this authority can manage your estate while you are away on vacation or otherwise can’t handle the day to day decisions. It is important to understand that there are actually several different types of Power of Attorney, each designed to accomplish specific goals. Read through these different types so you can be sure to use the one you need.
Limited Power of Attorney
Limited Power of Attorney, which is sometimes called a Special Power of Attorney, is used to grant someone the authority to perform only very specific tasks. You could, for example, grant someone Power of Attorney to negotiate on your behalf to purchase a vehicle, and then sign the documents to make that purchase. In reality, most Power of Attorney documents are limited in some way and would therefore qualify as being in this category.
Springing Power of Attorney
If your Power of Attorney document is written in such a way as to make it so it only takes effect if a specified event takes place, it is known as a Springing Power of Attorney. You can set it up so that it takes effect upon a set future date in the event that you are diagnosed with certain conditions, you become incapacitated, or any number of other things.
General Power of Attorney
If you make someone the General Power of Attorney, they will be able to make virtually every business or financial decision on your behalf. This is a lot of power, and typically isn’t used as most people will want to have some sort of limitations in place. If you have someone you trust to act for you, however, creating a Springing General Power of Attorney can be an easy way to grant them authority should it become necessary.
Durable Power of Attorney
A Durable Power of Attorney will remain in effect from the moment it is put into effect regardless of what else happens. Most Power of Attorney orders will stop being effective should the principal (you) regain the capacity to make decisions. If the document is written so that this is not the case, it becomes “durable.”
Take Care with Power of Attorney
As you can tell, Power of Attorney documents are very powerful and it is important to take care with who you name, and in what situations. Working with an experienced attorney can help ensure you get all the benefits of this type of estate planning, without running into problems. Contact us to go over your options today.