A power of attorney is a legal document that empowers a person to make specific decisions for you or direct control of your assets.
When assets are tied up in retirement accounts and something happens to the individual in charge of the account and he or she can no longer make decisions, Power of Attorneys are the only way to access those accounts without going to court. Losing a person is hard, but taking care of a person who is incapacitated can be very difficult. A power of attorney makes this situation a lot easier, as the caretaker will at least have access to the assets required for complete care.
What is a “Durable Power of Attorney?”
The durable power of attorney allows the agent to act for a person if they are incapacitated or if it is unsure whether they are dead or alive. Because many people execute these forms to plan in case of incapacitation, it’s extremely important to make sure the document has the proper language needed for a durable power of attorney.
Medical vs Financial Decisions in a Power of Attorney
Most people need a financial/legal power of attorney and a medical power of attorney. These do not need to be separate documents. However, in the case that a person wants different people to make financial decisions than those who make the medical decisions, two documents can be beneficial. Whether it’s one document or two, it’s important that the powers of attorney are reviewed to cover most situations, ranging from banking to insurance to health care choices. A power of attorney may be drafted for almost any specific decision to give another the power to make that decision – for example, in the case where one may want a specific individual to be responsible for the home and another for the car.
Powers of Attorney – One Part of a Complete Package
Powers of Attorney are no longer effective upon death. Therefore other estate planning documents such as wills and trusts are extremely important. Without a power of attorney designating someone to make decisions, a person must go through the probate court to have someone appointed to make those decisions. A power of attorney is a simple way to help your friends and family avoid these hassles.
On a final note, while many young people do not have enough assets to truly NEED a will, they certainly have the potential for medical issues and absolutely need a power of attorney no matter the age. Many clients even choose to execute a power of attorney for their minor children’s health care decisions so a grandmother or other trusted caretaker can act in the event of an emergency where the parent is not available.
Free Estate Planning Consultation
Burkhardt Law offers a free estate planning consultation. Take the steps necessary to protect your friends and family from unnecessary hassle and expense if they should suddenly need to care for you, your children or your assets. Request a free estate planning consultation today.