If you’ve begun thinking about the importance of estate planning to safeguard the future of yourself and the family members who rely on you, a critical component of any plan is a power of attorney.
A power of attorney is a legal document you can use to give someone else the authority to take specific actions on your behalf, such as signing your checks to pay your bills or selling a particular piece of real estate for you. The principal (you) determines the amount of power given to the attorney-in-fact (the person acting in your stead), and this individual can be given the authority to deal with only one particular issue (a specific power of attorney), or to handle most of the principal’s personal and financial matters (a general power of attorney).
Durability is something encountered when discussing the subject. If a power of attorney is durable, it remains valid and in effect even if you become incapacitated and unable to make decisions for yourself. A durable power of attorney does become void at death. It’s important to note that if a power of attorney document does not explicitly say that the power is durable, it ends if you become incapacitated.
There are three kinds of powers of attorney:
1. Durable Power of Attorney: The Durable Power of Attorney is effective upon signing and remains effective until death. The Durable Power of Attorney is effective whether you are competent or incompetent.
2. Power of Attorney (not Durable): The Power of Attorney is effective upon signing, but is not effective should you become mentally incompetent. This Power of Attorney is commonly used for people that need someone to take care of a single task, such as the sale of the home or paying bills while they are out of town. This Power of Attorney does not allow the designated agent to continue acting on your behalf if you become incapacitated.
3. “Springing” Durable Power of Attorney: The Springing Durable Power of Attorney is effective at incapacity, not at the time of signing. This document is used when you do not want anyone involved while you are mentally able to handle your own financial affairs. Therefore, it “springs” into effect at incapacity.
It’s good to remember that having a health care power of attorney does not cancel your right to give medical direction to physicians and other health care providers when you’re able to do so. A health care power of attorney only becomes effective when you don’t have the capacity to give, withdraw, or withhold informed consent regarding your health care.
The attorney-in-fact can be a spouse, adult child, relative, or trusted friend of the principal, as long as he or she acts in good faith on behalf of the principal at all times. It should be noted that the actions of an attorney-in-fact are legally considered those of the principal, so the principal should always choose a trustworthy individual.
An experienced Huntsville estate planning attorney can help with the designing and creation of a power of attorney. Preparation of such a document, along with a will and a health care directive, ensures that your health and financial matters will stay in the hands of those you trust. The local expertise of the estate planning attorneys at Martinson & Beason, P.C. will help you craft a sound plan to secure your family’s future.