The importance of establishing powers of attorney

The importance of establishing powers of attorney

| Jan 12, 2021 | Estate Planning

During the estate planning process, you will need to make certain considerations that you cannot account for in your will or trust. One such consideration is who will take care of your affairs in the event you can no longer do so yourself. While you may be healthy now, you will not want to leave your loved ones scrambling to create a plan if you suddenly fall ill or become disabled. You can avoid this outcome, though, by establishing powers of attorney.

How powers of attorney works

A power of attorney is an instrument that authorizes an attorney-in-fact – also known as an agent – to handle your affairs if you can no longer do so yourself, or if you are unable to take care of them in person. Most people name a relative as their agent, though you can appoint anyone close to you to this role. You will want to make sure, though, that the agent you choose understands your financial and medical affairs.

You will need to establish at least two different powers of attorney to make sure all your affairs are handled. By establishing a financial power of attorney, your chosen agent can manage your bills, accounts, investments and other related matters. And by establishing a medical power of attorney, your agent can manage your medical treatments and end-of-life care.

Durable and springing powers of attorney

When establishing your powers of attorney, you may want to consider making them durable or springing. Conventional powers of attorney lapse if you become incapacitated, whereas durable powers of attorney do not. Springing powers of attorney only go into effect if you become incapacitated. If you want your powers of attorney to work in one of these manners, you must use specific language when establishing them to ensure that they do.

Having powers of attorney in place will protect you if you cannot manage your affairs in the future. An estate planning attorney can help you establish yours and make sure their provisions are enforceable.