Powers of attorney are essential to estate planning.
Many people hold the misconception that estate planning is only important for when you die.
Although wills, trusts, and beneficiary designations are important aspects of estate planning, there is more.
Estate planning can help you even while you are alive.
According to a recent Tri-County Times article titled “Power of attorney protects loved ones,” powers of attorney are necessary to protect your finances and health care decisions while you are alive.
Powers of attorney are legal documents granting authority to an “agent” or “attorney-in-fact” to act on your behalf should you become incapacitated.
Like death, people cannot predict when they might become incapacitated and unable to make their own decisions.
Powers of attorney protect you in these unfortunate circumstances as they remove legal barriers so your trusted friend or family member may act on your behalf to pay bills or make medical decisions.
There are different powers of attorney to accomplish different things.
There four main types: a general power of attorney, a durable power of attorney, a special power of attorney, and a health care power of attorney.
How do they differ?
Some vary by what they cover.
For example, a health care power of attorney gives authority over medical decision.
A durable power of attorney relates to the appointments covered by a special, general, and health care power of attorney, but it remains in effect or takes effect if you become mentally incapacitated.
Other powers of attorney have a time frame covering when they are in effect and they can be set to expire when appropriate.
Work with an experienced estate planning attorney to create powers of attorney to meet your specific circumstances.
Doing so will ensure your affairs are managed by a trusted individual when you cannot do so yourself.
Reference: Tri-County (MI) Times (January 24, 2019) “Power of attorney protects loved ones”