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3 things people need to know about powers of attorney

On Behalf of | Jun 3, 2024 | Estate Planning

Estate plans typically contain testamentary documents. These documents take effect after someone dies and provide instructions about their wishes. Wills and trusts are common inclusions in modern estate plans. Yet, people also have the option of adding living documents to their estate plans. These documents take effect while someone is still alive and potentially in need of support from others. Powers of attorney are useful for people in a variety of different situations.

Those preparing for retirement, those worried about health challenges and those with unique personal circumstances are among those who may benefit from adding powers of attorney to an estate plan. What do people generally need to understand about powers of attorney?

The importance of choosing the right agent

The entire purpose of powers of attorney is to designate someone who has the legal authority to act on someone else’s behalf when they cannot communicate or lack the capacity to enforce their preferences. People need to select agents or attorneys-in-fact who are competent and ethical. Their availability is also a key consideration. The process of selecting the right agent can take quite some time and may require a few uncomfortable conversations with close friends or family members.

The ability to restrict an agent’s actions

Many people dislike the idea of drafting powers of attorney because they imagine that they must give up all financial and medical control to another person. However, people have the option of creating very precise documents that only grant specific forms of authority to the agent they select. They could limit financial powers of attorney to accessing specific resources or paying certain bills. They can also give very clear instructions about when powers of attorney take effect, such as requiring that their incapacitation last for a certain amount of time. Imposing the right restrictions on powers of attorney can help people feel more comfortable about giving someone else authority over their health or finances.

The benefit of durable documents

People often think of powers of attorney as useful in scenarios involving unpredictable emergencies. However, they can also be very helpful for those who might encounter predictable age-related health challenges. Powers of attorney could protect older adults from the possibility of guardianship sought by someone who does not have their best interests at heart. Durable powers of attorney can protect those who have permanently lost their testamentary capacity and who might otherwise be subject to a court-ordered guardianship.

The decision to add powers of attorney to an estate plan can protect an individual, their family members and their assets from many challenges that are preventable. Rounding out an estate plan with extra documents can be a smart decision for those thinking about the future.