Why Having a Power of Attorney Is so Important
What would happen if you were sick or incapacitated and needed to make an important decision regarding your health care, finances, or business? Who would you want to make these important decisions on your behalf?
Unfortunately, this becomes more than just a hypothetical question as you age. At some point, as a person gets older, their physical capabilities and mental health may start to diminish. In some situations, someone else may have to take over and start making decisions for you.
To ensure this can be done, you must have a POW or Power of Attorney document.
What is a Power of Attorney?
The power of attorney is an official authorization where you to name someone to act and make decisions for you if you can’t. The purpose of a Power of Attorney is to name someone to act and make decisions on your behalf if you become incapacitated in some way, either permanently or temporarily, the person you name on the document will step in and make decisions for you.
Usually, the person selected for this is a spouse, child, relative, or friend. This individual is designated as your attorney-in-fact or agent in the document. It means they are expected to make a good-faith, informed decisions involving important issues like business transactions, financial matters, tax returns, health care options, insurance policies, and legal matters.
Reasons to Create a Power of Attorney
Having a Power of Attorney can give you peace of mind. It assures that everything you work to achieve in life is managed based on your wishes, even if you can’t make decisions yourself.
If you don’t have a POA, your personal dealings and assets may be managed by a representative appointed by the court. This individual will know nothing about your intentions or wants. Also, avoiding this with a POA will help your estate save money, which gives you more to leave your beneficiaries upon your death.
Different Types of POA Documents
You can find several different types of POA agreements.
A limited Power of Attorney or “special” POA is designed if you want to allow your agent to handle just one thing. This may be controlling a safe-deposit box or selling real estate. It is also used if you want to designate your spouse to make medical decisions on your behalf and a friend to handle all business-related decisions.
A full or general Power of Attorney provides more powers to the agent you choose. This usually includes everything from health care decisions to business dealings, financial transactions, and more. A general Power of Attorney will be included in your estate plan in most cases.
Work with an Attorney to Establish Your Power of Attorney
If you want to create your Power of Attorney, working with an estate planning attorney is a good idea. They can help you decide what type you need for your situation and ensure all the proper steps are taken to ensure it is legal. Being informed is the best way to get your documents to help plan for the unexpected.