When you start estate planning, you may focus on the need for a will. After all, the will is the most common legal document that people say they need to have as they age.
The reality is that a will is not all you need, and your power of attorney designation could be even more important. A power of attorney is a legal document that designates another person who will act on your behalf when you’re unable to do so. This person may make decisions for you when you’re sick, disabled or after you pass away, so that you can rest easy knowing that they will take care of your estate and carry out your wishes.
When does a power of attorney get their legal power?
Usually, a POA only has the authorization to make decisions when you are unable to act and take care of affairs yourself. So, they may be asked to make real estate or banking transactions if you’re no longer able to, or they may handle your personal affairs, such as bills. In your POA document, you can detail just how much power you want to give them, so that they don’t have authorization to do things that you don’t want them to do.
Who should you select for a power of attorney?
When you’re trying to pick someone to be your POA, it’s important that you choose someone who is capable of carrying out your wishes. You want someone who is going to be honest and be able to tell when they need to reach out to an attorney for support.
It is most important to choose someone you trust, because they will act on your behalf when you cannot make decisions for yourself. You may want to choose two or more POAs, so that there is a backup prepared to take over if another person cannot take on the role for one reason or another.
Can you limit your power of attorney?
Yes, you can limit the POA, so that the individual has limited powers. They may be able to represent you in some ways but not others. For example, you could set up a POA that applies to financial situations but not to your health care decisions.
Your attorney can talk to you more about having a good POA and how it can help you feel more comfortable knowing that someone will be there to take care of you or to handle your assets if you pass away.