April 11, 2014. Two weeks back I had covered some of the basic elements of an estate plan. Specifically, the Will and the Trust. An equally, if not more important, component in your day to day life are the Powers of Attorney, which come in two species. There is a Financial Power of Attorney, which goes by the name of Durable General Power of Attorney. There is also the Health Care Power of Attorney, which itself is known by a couple of different names. Nomenclature aside, it is the functioning of the documents that is important. These documents, in two very different ways, take care of you while you are alive, whereas most of the other aspects of estate planning account for when you are gone.
The Durable, or again, Financial Power of Attorney takes effect when you can no longer make financial decisions for yourself. That may be because you are unconscious, or lack the mental faculties to properly manage your financial affairs. The term for this would be incapacitated. Once incapacitated, this Power allows for someone else to make financial decisions for you. Though the powers granted this person are broad, it is really intended for handling your daily affairs, such as writing checks, receiving payments, paying bills, and making deposits.
The Healthcare Power of Attorney is essentially the same thing, but for medical decisions. If you are unconscious or incompetent, this allows someone to make medical decisions for you quickly and in the manner you would want them to be made. As national, well circulated stories attest, not having this document in place is problematic.
Without trying to oversell the point, these need to be in place because they take care of you. Make sure you have them, make sure your parents have them. As a final word, you always need to pick a person to serve this role. They will go by the title of agent or Attorney-in-Fact. The best thing you can do for yourself is pick someone you trust, and that knows what you want.
For additional information about powers of attorney or estate planning, contact the Goosmann Trust Law Counsel at info@goosmannlaw.com or call 712-226-4000.
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