Every day, you make important decisions about your finances, health, assets, and other vital aspects of your life. However, what could happen if you were suddenly unable to accomplish this? Even though we constantly strive to be prepared, unanticipated things like car accidents or medical diagnoses can happen occasionally. Make durable power of attorneys to shield yourself from the problems and doubts these circumstances may cause.
Through the power of attorney, you can lawfully designate someone else as your decision-maker. Generally speaking, you can designate any responsible adult as your agent, including your spouse, an elder child, a lawyer, a parent, or a family member.
You must be well-informed if considering creating a durable power of attorney. Here are things you should know:
- Understand the power you’re giving
Regardless of the principal’s health or mental state, the law allows a durable power of attorney to be used once granted. A permanent power of attorney reduces the possibility of a court appointing a guardian in the event of incapacity.
You create an agency relationship when you name someone to function as your “attorney-in-fact” or agent. The person will make decisions about your health care, finances, and long-term living on your behalf even if you become incapable. The agent has several legal obligations and privileges, and they must act in your best interest.
Generally, a power of attorney grants the chosen agent broad, limitless power. Therefore, you should only choose someone you fully trust. Your agent will have power in regards to managing your bank accounts, real estate, and other investments.
- Understand the various types of power of attorney available
Before you draft a power of attorney, you must comprehend the different kinds of power of attorney.
Limited power of attorney– the agent has authority under this power of attorney for a particular assignment or time. For example, they might act as the principal’s agent in a real estate deal. They have the power to sign any required documentation and represent the buyer as their agent. Their authority ends when the transaction is completed. If a principal is unavailable (for example, overseas), they may date a power of attorney. The extent of authority is limited in time by a power of attorney.
A springing power of attorney is activated upon the happening of a specific event. This usually happens when the principal can is incapacitated or aren’t in a position to care of their affairs.
A durable power of attorney is effective once signed unless the principal indicates a different start date. This power of attorney is “durable” because it continues even if the principal is subsequently rendered incapacitated. This type of power of attorney ends upon the principal’s death or revocation.
- Choose carefully
Despite it seeming simple, this choice could generate problems for families. Over time, relationships can change. Someone you formerly trusted may be no longer significant in your life, or their situation has changed, so they cannot act in your best interests.
The individual you designate as your attorney-in-fact or agent must have your trust. The ideal candidate would be someone the rest of your family approves of. Don’t choose your eldest child, for example, unless that child is also the most responsible in the family.
