What are powers of attorney?
A power of attorney document provides the legal authority to someone you appoint to make decisions about your property or personal care while you are still living. These documents are optional, but essential tools of estate planning. You may appoint a trusted individual, like a friend or family member, to bear the responsibility of making personal care or financial decisions on your behalf. The person you appoint does not have to be a lawyer.
There are two main types of power of attorney documents:
Power of Attorney for Personal Care
Power of Attorney for Property
Power of Attorney for Personal Care
A power of attorney for personal care is a legal document that provides a person with the authority to make personal care decisions about you if you become mentally incapable. Personal care includes your health care, housing, safety, hygiene, clothing and nutrition.
Your attorney’s authority is effective after you have become mentally incapable, that is, you are no longer able to make decisions about your personal care for yourself. You can provide your attorney with broad decision-making power over all personal care categories or implement guidelines and restrictions. Keep in mind that if you become incapable of making decisions in a particular area and your attorney does not have the authority to decide for you, it may be necessary for the court to appoint a guardian.
Power of Attorney for Property
A power of attorney for property is a legal document that provides a person with the authority to make your financial decisions. Your financial decisions include paying your bills or taxes, buying or selling property, or managing your investments. You can limit your attorney’s powers to specific assets or accounts.
You may specify when your power of attorney for property becomes effective. There are three options for when your power of attorney for property may take effect:
Restricted to only if you become mentally incapable
Immediately and continues to be in effect if you become mentally incapable, also known as a “Continuing Power of Attorney for Property”
Restricted to immediately and does not continue if you become mentally incapable, also known as a “Non-Continuing Power of Attorney for Property” and is intended for specific, temporary financial decisions.
If you become mentally incapable without having powers of attorney in place, your family may face complex, expensive, and time-consuming legal steps to manage your affairs. These documents provide clarity and ease in a difficult time by allowing you to choose who will speak and act on your behalf.
Having valid and up-to-date power of attorney documents is an essential component of any complete estate plan. It’s best to put these in place while you are still capable, to ensure your wishes are followed and to reduce stress for your loved ones.
Include your power of attorney documents in your estate plan today!
