Making the decisions about your estate plan can be a daunting task. We are faced with a plethora of uncertainties and questions about our future and what to do about our “stuff.” There are a few documents that a client should consider executing with an attorney to protect their estate. One document called a Power of Attorney, which often complements a Will, but is sometimes overlooked by a client.
A power of attorney is a legal document which gives someone else power to act as an agent of another. The principal who signs a power of attorney designates someone to make decisions on their behalf in case of incapacity. A principal can choose what specific areas in which another will have the right to make decisions.
Powers of Attorney usually include the ability to:
- Buy and sell property
- Buy, manage or sell real estate
- Handle banking transactions
- Enter safety deposit boxes
- File tax returns
- Tend to government benefits
- Enter into contracts
- Purchase life insurance
- Settle claims
- Exercise stock rights
The following are optional powers that can be granted to your agent:
- Maintain business interests
- Make transfers to revocable living trusts
- Hire professional assistance
- Make gifts
Example of Power of Attorney Responsibilities
A power of attorney might only have the power to pay bills or may have the power to sell and transfer real estate or make business decisions. For example, a mother may designate her son to be her power of attorney. When the mother’s dementia becomes debilitating to the point that she can no longer take care of paying her bills or keep track of medical records and insurance deductibles, her son has the authority to write checks from her bank account to pay her debts and to communicate with medical providers and her health insurance company to manage her medical bills.
Plan Ahead
A principal must sign the power of attorney when s/he is competent and understands the rights and responsibilities s/he is giving someone else to act on their behalf.
Without some documentation of a Power of Attorney or a Durable Power of Attorney can lead to many complicated issues that arise at the wrong time. This document can prevent a battle with a bank when the Agent needs to write a check on behalf of the Principal for the Principal’s doctor’s appointment. For this reason, a power of attorney generally needs to be drafted and signed before someone actually needs one.
Getting Legal Help
Our experienced estate planning attorneys can explain and will draft the Power of Attorney document that is right for you. Our attorneys will review the subtleties and differences between the different types of documents. CONTACT US TODAY AT (832) 510-2900 TO SCHEDULE A FREE CONSULTATION.