A power of attorney is a document in which you give another person, known as an agent or attorney in fact, the power to make decisions on your behalf. This person has the right to complete any legal act that is covered by the document.
During the estate planning process, the creation of a power of attorney document is likely to come up. When this happens, you will have many questions on your mind, including the following:
1. Why is a power of attorney so important? In short, this gives another party the ability to handle your affairs if you are unable to do so on your own. Not only does this give you peace of mind, but it will make things easier on your family should you become incapacitated for any reason.
2. Are all power of attorney documents the same? This is a common myth, but nothing could be further from the truth.
A popular option is a durable power of attorney, which begins when you sign it and remains active until the day you pass on or cancel it.
A springing power of attorney, however, activates when a specific event occurs, such as you becoming incapacitated. It is important for a qualified attorney to draft this document, as it must be clear to ensure that there are no challenges determining when the “springing” act occurred.
3. Are there any risks of a power of attorney? The primary risk is choosing an agent that will abuse his or her power. You need to be careful of who you select, ensuring that you can trust this person to do the right thing 100 percent of the time.
These are three of the most frequently asked questions regarding a power of attorney. If you are ready to create this type of document, meet with a local estate planning lawyer who can provide you with the assistance you require.