If you are starting the process of planning how to handle your estate, you may have heard of a power of attorney. This is a very important document that should be a part of your estate plan. The professionals at Elder Care Direction can help you to understand the different types of powers of attorney along with the provisions that must be included in each one.
What is a power of attorney?
A POA is a document in which you grant someone else the authority to make important decisions for you. The person who receives the authority is called the attorney-in-fact or the agent, but that person does not actually need to be a lawyer.
Durable powers of attorney are documents that contain language that extends the power to make certain decisions for you if you are no longer able to make decisions for yourself because of incapacitation. In general, DPOAs will remain in effect until they are revoked by the principal, or he or she dies. Courts are also able to invalidate or revoke the authority of an agent.
A regular power of attorney will end if you become incapacitated. You might benefit more by setting up a DPOA that will only become effective if you are incapacitated by an injury or an illness.
Powers granted by a POA
You are able to choose what powers that you want to grant to your agent. Some of the powers that are commonly granted include the following:
- Signing checks and paying bills
- Selling, buying and managing real property
- Handling insurance and legal claims
- Conducting business transactions
- Borrowing money
- Filing taxes
- Making medical decisions
- Making gifts or donations
When you are drafting a power of attorney, you will need to decide whether it will be limited or general. General powers of attorney may include a combination of powers while a limited power of attorney may grant power in limited categories. It is also possible to draft a special power of attorney, which may be effective for a single event or process such as signing a contract.
Types of DPOAs
Financial powers of attorney allow you to grant the authority to your agent to manage your finances if you become incapacitated. A medical power of attorney can be used by you to grant your agent the power to make health care decisions on your behalf.
How to obtain a power of attorney
It is important for you to understand the particular requirements of your state when you are drafting a power of attorney. When you are thinking about the power of attorney, you will want to take care in who you choose to serve as your agent. You might want to choose one person to make medical decisions for you while having another person make financial decisions. After you have drafted a power of attorney, you should review it on a regular basis to make certain that it still reflects your wishes.
It is important for you to have powers of attorney in place so that you can ensure that your needs will be taken care of if you can’t make decisions for yourself in the future. To learn more about POAs, schedule a consultation with Elder Care Direction today.