Even if you haven’t started your estate plan, you’ve probably heard the term “power of attorney” before. Power of attorney references the person who your lawyer will listen to in the event of you dying or being incapable of communicating. Since this person is basically making decisions on your behalf, a lot of care needs to be given when granting a power of attorney.
What does a power of attorney do?
The person who has power of attorney in your estate can do several things on your behalf. These include but aren’t limited to:
- Paying your bills
- Managing assets
- Making all financial decisions
- Making decisions regarding your health
If you don’t have a power of attorney decided in your estate plan, the state or your family will have to decide who will act as power of attorney. This makes what your family is going through very public as outside sources and attorneys might be consulted.
What are the benefits of having a power of attorney?
The biggest benefit is helping your family members during a difficult time. When you assign a power of attorney to manage your assets and give them out upon your death, you’re taking the burden away from your family.
What are the downsides of assigning a power of attorney?
While powers of attorneys are recognized and respected in most states, there are some hurdles. Some states won’t recognize a power of attorney if it wasn’t recently assigned, and some financial firms have their own requirements for someone to be a power of attorney.
Each estate plan is different, but assigning a power of attorney can be a helpful tool. To ensure that you follow all laws and choose a trustworthy person, you may want to work with a lawyer when assigning a power of attorney.