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 those with conditions that may prevent them from handling day-to-day financial matters or if you are traveling abroad and need another party to handle some affairs for you back in the states. The Power of Attorney basically has two forms that you can utilize.
General Power of Attorney
A General Power of Attorney gives broad and general authority to your agent to act on your behalf. It allows the agent to act in a wide variety of financial and legal matters and is commonly used in the event of the agent’s incapacity. If you have a General Power of Attorney the agent will be able to make decisions regarding your bank accounts, sign checks for you, buy and sell real estate on your behalf, move funds between your accounts, manage investments, and more.
Limited Power of Attorney
A Limited Power of Attorney, as implied by the name, limits power to a specific action. It allows you to appoint someone you trust to act for you in specific legal or financial matters. They commonly involve business, personal, and financial matters, and you can utilize a Limited Power of Attorney to grant a person the authority to handle such things as a real estate transaction or the sale or purchase of other assets.
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 their own decisions; however, a Durable Power of Attorney does not stop under these circumstances but will remain in effect until the principal revokes it.
There are many important facts to consider before you decide to grant a Power of Attorney to an agent. Contact us to go over your options today. Learn more about other estate planning essentials and whether you need a will or a trust.
