In today’s discussion of basic estate planning questions, we are going to take a look at questions about power of attorney. Understanding what a power of attorney is, what it is used for, then why it is so important when it comes to estate planning is important for everyone. Regardless of your age, circumstances, or individual estate planning desires, your estate plan will almost certainly include one or more of these vital tools. So, here are some common questions about powers of attorney that you might have.
Basic Estate Planning Question. What is a power of attorney?
A power of attorney is a special kind of legal documents. Through this document, a capable adult has the ability to appoint one or more representatives. The document gives those representatives specific decision-making abilities. Depending on the kind of power of attorney granted, the representative(s) can make choices on behalf of the person creating the power of attorney in one or more ways.
Basic Estate Planning Question. Do I have to be a lawyer or hire a lawyer to use a power of attorney?
This is one of the more common questions people have about powers of attorney, but it stems from a basic misunderstanding of terms. When we talk about powers of attorney, the term “attorney” simply means “representative.” Creating a power of attorney allows you to appoint a representative, known as an agent or attorney-in-fact. The personal organization you choose as your representative does not have to be a lawyer or know anything about the law at all. Further, when you choose someone to serve as your agent, that person does not become legally entitled to begin practicing law as an attorney.
Having said all that, it’s important to remember that because a power of attorney is a legal document, you should always have experienced estate planning lawyer create it on your behalf. There are specific California laws that apply the power of attorney documents, and unless you make sure your document complies with those laws, it could be useless.
Basic Estate Planning Question. What does a power of attorney do?
Through a properly drafted power of attorney you can give an agent right to make almost any kind of decision you can make. In most situations, people creating estate plans create powers of attorney that either grant an agent the ability to make financial decisions, or health care decisions.
The type of decision you want to delegate to your agent is entirely up to you. Not only that, but you can also place restrictions on the agent’s authority. For example, many people only want to give an agent decision-making responsibility if and only if they become incapacitated. In other situations, people might have to delegate some of their responsibilities to an agent if they are going on vacation, simply need assistance in carrying out a variety of tasks, or want someone to handle complicated affairs, such as tax preparation or real estate transactions.
- Protecting Your Assets in Retirement: Estate Planning Tips - March 27, 2023
- Estate Planning for Small Business Owners - March 25, 2023
- The Consequences of Not Having an Estate Plan - March 23, 2023
Leave a Reply
You must be logged in to post a comment.