Nothing is more important than planning for your future. While you may already have essential documents, such as your will, trusts, and guardianship documents, in place, there are other important documents you may want to include in your plan. One document people don’t often think about is a power of attorney.
You spend so much time thinking about preserving your legacy that you may not consider documents that protect in the event of an emergency. However, having a power of attorney in place is the easiest way to protect yourself and your loved ones if you become incapacitated. If you want to learn more about this powerful document, keep reading.
What is a Power of Attorney?
A power of attorney is an incredibly powerful document that you may want to consider including in your estate planning documents. When you have this document, you are giving a trusted individual in your life, known as the principal, the power to make financial and healthcare decisions for you if you are incapable of doing so.
When writing this document, you also have the option to specify in what situations or for how long the principal is allowed to make decisions on your behalf. While you might not think this is an important part of your estate planning decisions, this document provides peace of mind and helps avoid complications during difficult periods of your life.
Why a Power of Attorney is Important
Although you may think you don’t need a power of attorney, this document is an incredibly powerful and useful tool to include in your estate planning documents. Some reasons why having this document is so important include:
- Ensures Your Wishes are Followed: When you choose your principal, you are trusting them to act on your behalf. This person ensures that every decision made aligns with the decisions you would make. With their support, you’ll have peace of mind that your wishes are respected.
- Prevents Court Intervention: If you don’t have essential documents in place, your family may have to go through the court system to get guardianship or a conservatorship. This can be costly, long, and difficult to navigate during an already high-stress period of your life.
- Helps Family Avoid Conflict: Without a power of attorney in place, your family may be at odds with each other. Your power of attorney sets out how your affairs should be handled and allows them to make decisions without creating additional conflict.
Different Types of Power of Attorney Explained
There are several different types of power of attorney that you may want to consider incorporating into your estate plan. These powers of attorney include:
- Durable POA: This POA is valid, even if you are incapacitated, which makes it a great option for long-term support, including navigating finances and legal affairs.
- Non-Durable POA: This POA ends if you become incapacitated, and is best for short-term tasks, like managing your affairs while you’re out of town.
- General POA: This POA gives your principal broad authority to act on your behalf, but also lapses if you become incapacitated.
- Limited POA: This POA is best for providing support during a single event, like selling your home or handling your finances while you’re traveling.
- Springing POA: This POA only comes into effect if a specific triggering event occurs, such as your incapacitation.
- Medical POA: This POA allows your principal to make medical decisions on your behalf if you can no longer speak for yourself.
How to Choose the Right Person for Your Power of Attorney
When you are establishing a power of attorney, you want to ensure you’re choosing the appropriate person to act as the principal. But what makes someone a good fit for this role? You should select an individual whom you believe will act in your best interest and who is willing to take on the responsibility of handling your estate or decision-making.
However, this isn’t the only attribute you should consider. You also want to choose an individual who can remain calm and logical, even when handling stressful situations. It is also best to choose someone who lives close to you. While this isn’t essential, it can be beneficial if they need to sign documents on your behalf.
While you may feel obligated to choose a family member as the principal, this isn’t your only option. You can also speak to an attorney or CPA about becoming the principal. However, there may be some limitations or costs associated with choosing a non-family principal, which is an important consideration.
When and How to Set Up a Power of Attorney
If you want to ensure a comprehensive estate plan, the best time to set up a power of attorney is when you start your estate planning process. Talk to your attorney about incorporating this document into your plan to ensure you’re protected in the event of an emergency. It is also important to establish this document when you’re of sound mind.
From there, decide who you want your principal to be and what powers you are granting them. You should specify the plan’s durability and have it drafted, signed, and notarized. Give a copy of your power of attorney to the principal, bank, and healthcare providers, and keep the original copy in a safe place.
Finally, don’t forget to review this plan regularly. Things can always change, and by examining your power of attorney and other estate planning documents, you ensure the plan is still adequately protecting you years down the road. If, at any point, you want to revoke your power of attorney, don’t hesitate to contact your attorney.
Let Bishop Estate Law Help You
If you would like to add a power of attorney to your estate plan, turn to our Bishop Estate Law team for support. We can help you choose the appropriate power of attorney and ensure your estate plan protects you, now and in the future. Whether you’re adding it to an existing plan or starting from scratch, we’re here to provide you with essential support throughout the process.
When you are ready to begin this process, don’t hesitate to contact our team to schedule an appointment.