When people think about estate plans, not that it happens often, but if they do, it is mainly about the will. The will gets all the attention (and rightfully so) because without it, well, that’s a problem we’ve discussed before. If you die without a will it’s call dying “intestate”, and it can be a big problem for your heirs, including delaying their inheritance, costing them time and money going through probate, and perhaps even causing major rifts in the family—just not a good situation.
But today’s post isn’t about the will. Or about the trust, also a major component of many, but not all, estate plans. Think of a trust as an extra layer of protection you can provide for your loved ones. They will appreciate it.
No, today’s post is about the relatively “lowly” Power of Attorney. That document that estate planning attorneys recommend their clients include in their estate plans for several reasons. It truly can be a powerful document that benefits you now and your loved ones later. It can be customized to specific needs and expanded or limited to particular transactions.
The following four situations are great examples of when a Power of Attorney (POA) can be of great value.
1. Manage Financial Affairs: Once established, your agent (the trusted individual you selected
to act on your behalf) can step in to handle your banking, investments, and bills or make financial decisions if you’re unavailable (perhaps out of the country) or incapacitated (hospitalized and not in a position to make any financial decisions or deals.)
2. Make Healthcare Decisions: This kind of POA (a medical or healthcare POA) allows your agent, again someone you appointed in advance, to make medical decisions if you’re unable to communicate. In the event you are in the ER after a terrible accident and medical providers are offering two treatment options, but you’re in a coma or heavily sedated. Your agent can decide on your behalf. Or select healthcare providers or even decide end-of-life care. (It is essential when you establish this kind of POA and you’ve chosen your trusted agent that you share any wishes you may have about some treatment options or extent of end-of-life care with them so they can make informed decisions.)
3. Sign Legal Documents: This is another valuable benefit if you handle a lot of contracts or legal agreements in business or personal matters. It is especially useful if you travel and are not always available to sign documents in person. Your selected agent can sign on your behalf.
4. Handle Real Estate Transactions: Another very handy use for a POA is to have your selected agent buy, sell, or manage property on your behalf. If you own out-of-town property, this can be a time and money saver. Having an agent “on the ground” can handle the transactions for you.
As I said, the will usually gets all the attention when it comes to estate planning, but this one document, so versatile and useful, is often overlooked. If your estate plan needs updating, I’d be happy to help, and if you would like to add one or more types of POAs to your plan, now is the time to do so. Call me to schedule a consultation to review your needs and how POAs and other estate planning legal instruments can benefit you now and your loved ones later. I can be reached at 513-399-7526 or through my website, www.davidlefton.com.