Should You Give Someone Power of Attorney?
We often think of estate planning in terms of, “What will happen to my assets and property after I die?” However, there is another very important aspect to estate planning, and you should discuss it with your estate planning attorney: What will happen to your assets – and you – in the event that you are unable to care for yourself? What happens if you are incapacitated?
In many cases, people do not simply grow old and pass away in their sleep. Some of us will endure long, chronic illnesses, dementia, or other conditions that leave us unable to care for our basic needs or make important decisions. If you previously established a solid estate planning, you can rest assured that your assets and property will be divided as you intended upon your death. But have you addressed what happens in the event of you incapacity? If you don’t have this discussion now, you risk the courts making decisions for you in the even that you become unable to do so on your own.
If you act now, you have many estate planning options at your disposal, such as:
Select a General or Special Power of Attorney. This person can make decisions on your behalf, either in specific circumstances or in general. However, this privilege ends if you become incapacitated.
Select a Durable Power of Attorney. If you previously established a durable power of attorney prior to any incapacity, this authority will remain in effect even if you are unable to care for yourself or make decisions.
Select a Springing Power of Attorney. If you want to designate someone to act on your behalf, but only under specific circumstances or beginning on a particular date, you can establish a springing power of attorney. In other words, you can legally declare, “If I am incapacitated, I designate my daughter, Miranda, power of attorney over my affairs”.
Select a Limited Power of Attorney. When you establish power of attorney for someone, you have the ability to specify their exact rights and limitations. For example, you can designate someone to complete a real estate transaction, but have no other authority.
A power of attorney expires when you die, so this privilege will only allow someone to manage your affairs while you are living. Therefore, you should still consult with your estate planning attorney about post-death matters.
Keep in mind that giving someone power of attorney, even in a limited sense, grants them certain access and authority to your financial and business affairs. Make sure to choose someone you trust, and remember to investigate all terms of the agreement before you sign any legal documents.