Understanding the Importance of Powers of Attorney in Estate Planning

An important legal document to consider in matters of estate planning, power of attorney grants a stipulated agent or proxy the authority to make decisions for the document’s principal. So, if you want to allow others to manage your money, make binding agreements, sign important documents, and perform other official actions on your behalf, you’ll want to file a power of attorney.

Why Do I Need a Power of Attorney?

When developing a comprehensive estate plan, you will want to discuss the inclusion of one or more power of attorney documents as key preparatory risk-management measures. Power of attorney considerations are particularly important for aging people or those with serious health concerns because powers of attorney apply when the principal is incapacitated or otherwise unable to make informed, independent decisions.

After consulting with your attorney/estate planner, you can work with a qualified legal document preparer to file the power of attorney documents that are right for you.

Types of Power of Attorney

There are three basic types of power of attorney to meet a range of needs. You can tailor these documents to ensure that your financial and healthcare decisions are appropriately managed even if and when you become incapacitated. Ensure that your specific and unique economic and healthcare stipulations are followed according to your stated conditions with these documents:

• Financial Power of Attorney
  Covers financial affairs such as management of investment portfolios and bank accounts, the payment of bills, and buying and selling of assets.
• Medical Power of Attorney
  Covers medical affairs such as decisions involving medical treatments that must be made when a principal is incapable of making autonomous decisions.
• General Power of Attorney
  Can cover a broad spectrum of financial, medical, and legal affairs on a single document.

Durable vs. Non-Durable Powers of Attorney

The difference between durable and non-durable powers of attorney centers on when the designated agent’s authority begins and ends. Durable powers of attorney protect you in the event of incapacitation because they remain valid when the principal is unable to conduct their own business or make their own choices. Conversely, non-durable powers of attorney become invalid the moment the principal becomes incapable of communication or acting independently.

Your reason for pursuing a power of attorney will ultimately dictate whether you file for a durable or non-durable version of this document. Because they are generally designed to guide medical decisions after incapacitation, medical powers of attorney are typically durable. Financial and general powers of attorney, however, can be either durable or non-durable.

For More Information

If you have further questions about powers of attorney or other common estate or legal documents, contact First Class Signing Service today. Our team of outstanding signing agents are equipped to give you the information and deliver the signing solutions that you need. At First Class, we have the expertise necessary to prepare all your legal documents with unmatched quality, coverage and security.