When it comes to estate planning, determining power of attorney is important. A power of attorney is a legal document that allows someone else (known as the "agent" or "attorney-in-fact") to act on behalf of the person who created the document (known as the "principal"). Powers of attorney can be useful tools in estate planning, as they allow the principal to designate someone they trust to make financial or medical decisions for them if they become unable to make decisions for themselves.
Various Types of Powers of Attorney
Some of the most common types of powers of attorney used in estate planning include:
General power of attorney
This type of power of attorney grants the agent broad authority to act on behalf of the principal in a variety of financial matters, such as banking, investment management, and real estate transactions. A general power of attorney can be useful in situations where the principal will be unavailable or incapacitated for an extended period, such as during a long hospital stay.
Limited power of attorney
A limited power of attorney grants the agent the authority to act on behalf of the principal in a specific, limited area, such as real estate transactions or the management of a particular investment account.
A durable power of attorney
A durable power of attorney remains in effect even if the principal becomes unable to make decisions for themselves. This can be an important tool in estate planning, as it allows the agent to continue making financial or medical decisions on the principal's behalf if they become unable to do so.
A medical power of attorney
Medical powers of attorney grant the agent the authority to make medical decisions for the principal if they are unable to do so themselves. This can include decisions regarding medical treatment, end-of-life care, and other healthcare matters.
Springing power of attorney
A springing power of attorney only goes into effect when a specific event occurs, such as the incapacity of the principal.
When used in estate planning, powers of attorney can help ensure that the principal's wishes are carried out even if they are unable to make decisions for themselves. It's important to work with an estate attorney to ensure that your powers of attorney are properly executed and tailored to meet your specific needs and circumstances. Speak to an attorney and address this critical issue concerning your estate plans today.