Powers of Attorney

Let’s take a deeper look at Powers of Attorney. These along with a Trust and Will are the documents that make up the building blocks of an estate plan. This is why it is important to keep these documents up-to-date.

So, what exactly is a Power of Attorney? Essentially, it is a legal document by which you can appoint a person to be an “Agent” and act on your behalf in certain matters. There is the option to have subsequent agents as well, just in case the first person you designate is unable or unwilling to perform their duties.

Generally, these agents have the legal and decision-making powers that you would possess yourself. So, in the case of a Financial Power of Attorney, your agent can handle all manner of monetary decisions for you, including investments, inheritance, and taxes. Such powers can be granted either “immediately” or “springing.” The former means that the agent will be granted those powers as soon as possible, regardless of whether or not you can make those decisions on your own. In the cases of springing powers, an agent only assumes decision-making control if you suffer some form of incapacitation. Powers of Attorney can also be defined as being “durable,” which means that they remain with the agent whether or not you are incapacitated. If you choose not to make your Powers of Attorney function this way, all decision-making abilities will return to you upon your recovery.

Similar to Financial Powers of Attorney with monetary decisions, a Healthcare Power of Attorney allows you to designate an agent who can make medical decisions for you in the case you cannot make them yourself. Similarly, a HIPAA allows you to designate people who can have access to your protected health records.

Whatever Powers of Attorney you decide are right for you, it's critical that you keep them up-to-date at all times. Indeed, once a year, it's smart to review your Powers of Attorney and ensure that nothing has changed regarding your relationship with the agents that might make them an unsuitable choice. For instance, they may have gotten older or suffered a mental incapacity themselves. Alternatively, you may have someone whom you now trust more or who has more experience with your finances or health.

If you have questions about this or other estate planning issues, feel free to book a 15-minute consultation with us.