When most people talk about estate planning, they’re talking about a plan for their personal assets when they pass away. However, estate plans should also cover what happens in the event of an incapacitating illness or injury. Powers of attorney are essential in these situations.
A power of attorney authorizes another person to act as an agent or decision-maker on behalf of someone else. In the context of estate planning, a power of attorney goes into effect at the moment the estate planner becomes incapacitated. These documents are useful in many business scenarios as well.
When planning an estate, everyone should include two powers of attorney, one for medical decisions and another for financial decisions:
The durable power of attorney goes into effect at the moment of incapacitation. It allows another person to make medical decisions on behalf of the incapacitated individual. A durable power of attorney is similar to a living will in this respect.
A general power of attorney goes into effect at the moment of incapacitation and it gives financial authority to another person.
Powers of attorney are valuable for many business applications. Here are two types of business-related powers of attorney:
These documents cannot be revoked by their creators. They’re used in the context of business agreements where the creator of the power of attorney gives someone else specific powers or authorities for a specific period of time.
A special power of attorney gives specific powers to another person as well, but the creator retains the right to revoke the powers at any time.
In estate planning, powers of attorney allow estate planners to name the person who will manage their finances and make life or death decisions on their behalf. A power of attorney will also prevent disagreements among family members over “who knows best” for their loved one. Without a power of attorney in place, family members could be left scrambling to file the appropriate legal documentation required to gain authority, resulting in costly and stressful delays when time is of the essence.
In a business setting, a power of attorney could make certain types of cross-country transactions and business relationships possible when they can’t be achieved by any other means.
Before creating or signing a power of attorney, you may want to seek the guidance of an experienced Tucson lawyer at Moore Law. Our attorneys will (1) draft a power of attorney that holds up in court; (2) protect your legal rights; and (3) ensure that all the parties involved fully understand the document.