Creating a comprehensive plan to distribute your assets and provide for your loved ones after your death is one of the more challenging, but rewarding tasks you will undertake. Estate planning, however, is more than just establishing a last will and testament or a trust agreement. A separate document, called a durable power of attorney, ensures that your affairs are handled by someone you trust in the event you become unable to handle them yourself. While a durable power of attorney cannot prevent accidents or reverse aging, it can provide you and your loved ones with peace of mind.
Let us share with you some common questions our clients ask us about durable power of attorneys so you can consider whether it is a good option for your planning needs.
A power of attorney is a legal document, which is in practice often set up at the same time as a will or trust agreement. The power of attorney designates a family member, friend, or trusted advisor as an agent to act on your behalf, in both legal and financial matters, in the event that you become incompetent. “Durable” simply means that the responsibilities you assigned in the document stay in effect if you become incapable of handling your own matters, or are otherwise incapacitated.
You can assign whoever you like as durable power of attorney, but it is crucially important to entrust such a power to a person you trust implicitly. Generally, the durable power of attorney makes critical decisions about your finances, manages your property, and acts on your behalf with third parties. Further, your durable power of attorney may apply for public benefits like Medicaid on your behalf, may access all your accounts, open and respond to your mail, and even create emergency estate planning, if needed. You may want to consider designating back-up decision makers, in the event that something should happen to your primary agent under your durable power of attorney. Ultimately, it is your decision. Think about who you know would act rationally on your behalf while keeping in mind your wishes.
There is no question that you should absolutely discuss establishing a durable power of attorney with your estate planning attorney. He or she will be able to guide and support you through the process, ensure that your documents are properly executed, and may be able to help you decide who you should designate as agent under the durable power of attorney. It is crucially important to thoroughly complete estate planning while you are of sound mind to do so. While not often the case with thorough planning, if your durable power of attorney document leaves certain responsibilities unassigned, your loved ones may seek court-approved guardianship of you. A guardianship proceeding typically results in the court allocating a person or entity to handle your affairs. This lengthy and expensive proceeding can be prevented by meeting with your estate planning attorney and ensuring your wants and needs are heard and legally executed in your estate planning documents.
We know how challenging estate planning can be at first. With so many options and decisions to make, we are here to be a resource for you. Contact us with your durable power of attorney questions because we are here to help.