You may have heard of a Power of Attorney, but you may not really know what it is or why it is such a valuable estate planning tool.
So let’s look at the power behind a Power of Attorney.
What is a Power of Attorney?
A power of attorney is a legal document that gives one or more persons the legal authority to act on your behalf as your agent. The power can be limited to a particular activity (selling your house) or it can be general in its application (handling all your affairs).
All states accept a power of attorney, but the rules and requirements for proper execution differ from state to state. That is why you should consult with experienced counsel.
There are different kinds of powers of attorney. A power of attorney is a flexible tool that can give your agent either temporary or permanent authority to act on your behalf. It can take effect immediately, or only upon the occurrence of some event, like your incapacity. A power of attorney can be revoked, but most states require that you notify the agent named in the power of attorney upon revocation.
Why is a Power of Attorney Important?
In estate planning, we see the value of a power of attorney almost every day. People who have all of their necessary powers of attorney in place when/if they reach that stage where they can no longer handle their own affairs, have a tool that allows their financial and personal affairs to continue smoothly.
Those without a power of attorney when they reach the point where they cannot handle their own financial or personal affairs cause family chaos, run into court interference, incur unnecessary cost, and oftentimes experience disastrous results. If you do not have a power of attorney and you become unable to handle your financial and personal affairs or make health care decisions for yourself, the court may appoint an agent for you. Court appointed agents are called “conservators” or “guardians,” depending on whether they are making decisions about you or your estate. If the court has to intervene to appoint an agent for you (guardian, conservator ) two things are very likely to happen. Someone you would have otherwise not chosen will be appointed as your agent to handle your personal affairs and make your decisions for you, and it will cost you a good amount of money in attorney’s fees, court costs, and delay.
How many do I need?
There are at least three major Powers of attorney that we recommend for a thorough and fully-executed Legacy Estate Plan. Please see The Essential Documents of Will-Based Estate Planning for more details on this.
We Can Help You Prepare.
As experienced trusts and estate attorneys we devise a Legacy Estate Plan for you that encompasses both your will/trust as well as ALL of your necessary Powers of Attorney.. We offer free consultations, and we serve all of Arizona. Our offices are located in beautiful Sedona and we serve Verde Valley as well. We can help you provide and plan for your loved ones. Call us at 928-282-1483 or contact us here.