Estate planning is a plan that involves the creation of a few legal documents other than a will. These documents which helps enhance a typical estate plan that involves a will, are important. Some of these documents include a trust, beneficiary designation, letter of intent, power of attorney, health care directives, etc.
For the sake of this article, we’ll be considering a power of attorney. Aside from a will and a trust, a power of attorney is the next important legal document as far as estate planning is involved. But what makes this document important? Why do you need to create one? I’ll reveal that to you in this article.
What is a power of attorney?
A power of attorney is simply a legal document that gives an individual (attorney-in-fact or agent) the right to act on the behalf of another individual (principal). A POA is in effect provided the principal is alive and can only be enacted by a principal who mentally ok.
Of course, you may think that appointing a power of attorney would strip the principal of the right to make crucial decisions on how he wants his assets to be used. However, this is not true as the power of attorney is only activated when the principal is no longer mentally capable of running his or her personal, legal, and financial affairs.
A POA form can be used to designate a power of attorney to represent a person and their affairs in many areas if they become unable to make decisions themselves.
Who should get a POA?
For individuals who travel a lot or are in the military and will be serving in other countries, a power of attorney document is an ideal option that could be considered. Other age groups should consider creating setting up this legal document are retirees or seniors.
Who should you designate as your agent?
When selecting an agent, or the individual who will be in charge of making those important decisions on your behalf, ensure that you choose wisely. This individual will have unlimited access to your finances, your home, and also, your health. When choosing an agent make sure you choose someone you can completely trust.
When will a POA take effect?
The power of attorney doesn’t take effect until the principal cannot make crucial decisions on his or her own, or if the principal is incapacitated. This can either be physical incapacitation or mental incapacitation. If it is physical incapacitation, the principal may be in coma. If it is mental incapacitation, the principal, is plagued with some kind of mental illness that has taking away his or her ability to think straight.
Importance of a Power of attorney?
As soon as you become incapacitated, your loved ones can’t simply make those crucial decisions for you because they are your relation. In the modern world we find ourselves, things don’t work that way. Without a POA, families may have to go through a lengthy, stressful process to make your decisions, which could ultimately affect you and your family.
In addition if you fail to designate someone, the court has the right to do so on your half if you become incapacitated and you have no say regarding who should be in charge.
Power of attorneys make it easier for you and your family. So, consider setting up a POA now to save you and your family the trouble later.
Need an Estate Planning Attorney?
An estate plan is best created with the help of an estate planning attorney. Our estate planning attorneys aren’t only experienced, they are versed in the estate laws of New York. These professionals will ensure that your estate is planned according to the laws of New York and according to your wishes.
Do you need to update your estate plan? Or do you need to draft or create any of the estate planning documents listed above? Don’t hesitate to contact our attorneys. They are good at what they do and can provide you with the best estate planning services.