Estate Planning Law and Power of Attorney
No one plans on being in a car accident, or incapacitated, or being diagnosed with dementia, but not planning on it doesn’t stop it from happening. There were 4,069,748 people injured in car accidents in 2016. Every 66 seconds, someone in the United States develops Alzheimer’s. The reality is, estate planning isn’t a good idea, it’s necessary. Estate planning relies on facing some tough future scenarios, good planning and meticulous execution. One critical part of a well-executed estate plan is considering which powers of attorney you need to put in place.
The Definition of Power of Attorney
Power of attorney is a legal document that allows you to appoint someone else to make decisions on your behalf in the event you are unable to do so. The person creating the power of attorney is referred to as the “principal” while the person acting on his or her behalf is called the “agent.” There are different types of powers of attorney to consider when creating your estate plan.
Estate Planning and the Different Types of Power of Attorney
Estate planning is an important process to prepare for the future of your estate and assets. While it may be unpleasant to think about, you may not always be around or available to make important financial and medical decisions for yourself or your loved ones. This is where a power of attorney can help.
- Durable Power of Attorney
If you appoint someone with a durable power of attorney, you give him or her the power to manage your affairs in the event of your incapacitation. The power of attorney has no set time limit and the scope is very broad. Your appointed representative can be responsible for a wide range of decisions on your behalf.
- Non-durable Power of Attorney
This appointment is much more restrictive than the Durable Power of Attorney. Non-durable power of attorney is generally used for a single transaction or a limited time frame. Once that transaction or time period is up, the nondurable power of attorney ceases to be in effect.
- Healthcare Power of Attorney
This power of attorney is exactly what it sounds like. You designate an agent to make medical and healthcare decisions on your behalf. It is important that you communicate clearly your wishes regarding your short and long-term healthcare treatments and any personal or religious beliefs that would impact your care. Your agent is responsible for carrying out your wishes, but in the event you have not documented those wishes, your agent will have to use his or her best judgment when making important care decisions or go to court to get appointed to make decisions for you.
- Special or Limited Power of Attorney
This power of attorney is extremely specific and limiting. If you travel frequently and need to appoint someone to make decisions regarding your children, you may opt to use this type of power of attorney. By definition, your agent’s decision making would have a very narrow and specific scope and/or timeframe.
Trust and Estate Planning
It is important that you understand the various types of powers of attorney, because you may need multiple types when creating your estate plan. In the event you are incapacitated, whether due to illness, accident or old age, you should plan ahead. You will need to select the person or people to act on your behalf as your agent(s). A trusted friend or family member may be the perfect agent to handle your healthcare but may not be the best person to make financial decisions. It is critical that you put the right people in the right positions to best benefit your estate and loved ones. Your agent(s) should be trustworthy, capable and willing to take on the responsibilities involved. Once you select your agent(s), it is important that you communicate your choices and wishes for the future. This will help deter any confusion or conflict down the road. It is also very important to tell your named agents that you have named them to make decisions for you.
Estate Planning Law Firms
A wills and estate planning attorney can be an invaluable asset throughout this process. The best estate planning attorneys will listen to your needs and wishes and help you execute a legally binding plan complete with power of attorney documents as required. He or she will also advise you of federal and state specific laws and how they may impact your estate planning. Your attorney may also keep a copy of all your documents and assist your agents in executing their jobs and be available for any legal questions that may arise. Skilled legal representation from an attorney with estate planning expertise throughout this process can make your choices and execution of your wishes much easier.
If you’re looking for an estate planning attorney in Phoenix, contact me and we can talk about your estate planning goals, whether you need powers of attorney and more.