A good estate plan involves more consideration that simply drafting a will. There are a number of tools in the estate planning box, and it is important to understand the different benefits and implications of each. While not everyone will utilize every tool, a discussion with an attorney can help those in Las Vegas ensure that they have chosen the ones that benefit their situation.
One of these tools is a durable power of attorney, but what is this tool and how could it benefit me?
A power of attorney is a document that grants certain powers to another individual over your, the principal’s, financial matters or healthcare decisions. These powers can be as broad or restrictive as the principal wants them to be. The “durable” part of this tool allows the powers to continue in the event that the principal becomes incapacitated.
Why would one give this power to another? This power has its benefits. Maybe you are an individual that frequently travels out of the country. A power of attorney allows another to make the day-to-day decisions necessary for smooth operation of your financial matters while you are gone.
We mentioned incapacitation above. What if you are in an accident that leaves you in a coma that lasts for a period of time? Even a few months worth of failing to pay the bills or make investment decisions could cause permanent damage to your estate.
There are, of course, some risks involved in handing over this significant amount of power. It’s a good thing that the individual that is granted this power has a legal duty to uphold when they sign the document. Choosing someone that you trust or a professional is one way to maximize the chance that the individual will uphold this duty in your benefit.
Another protection is to name not only one person, but two people that are required to act jointly. An individual can also include restrictions or requirements, like an obligation to send annual accounting statements.
As noted above, there are benefits and there are risks, which is why one should consult an estate planning attorney whenever considering or drafting a power of attorney.
Source: Wahpeton Daily News, “A power of attorney works on your behalf,” Linda Dietz, Jan. 23, 2014