No one is immune to aging or the loss of mental focus that may come with it, Furthermore, you may fall ill any day and be unable to handle any financial transactions or business in life, this includes making key financial decisions. No one likes to think of such possibilities, but the reality is that almost every family faces such a situation. While financial and medical powers of attorney can’t prevent you from aging or accidents, they can make life easier for you and your family.
A power of attorney is a legal document that grants one the power to act in your place, in the event you ever become incapacitated. This person is known as an “attorney in fact” or an agent. Your attorney in fact is made to sign your name and is obligated to act in your best financial interest based on your wishes.
In estate planning, there are two types of powers of attorney, mainly the springing power of attorney and the durable power of attorney.
Springing power of attorney
This only goes into effects under circumstances you specified, common one being you become incapacitated. This means that your agent cannot act unless he/she provides a document proving that you are incapable of handling any finances or making decisions.
Durable Power of Attorney
This one is effective immediately and your agent does not need documents from court or the doctors to prove that you are incapacitated. An estate planning lawyer salt lake city can help you decide on which form makes sense in your current situation.
It is important to choose your agent carefully, as this should be someone trustworthy, competent and one that is willing to fully take on the responsibility.
In the case that you become incapacitated without having assigned the power of attorney, the court appoints a guardian who is paid annually to report on your situation. This may cost your family over $1,000. To avoid such a scenario, it is best to discuss with your attorney about estate planning. He/she will guide through the process and the documents required assigning the power of attorney.
What is power of attorney and who assigns it? Read on to find out why its important and how your estate planning attorney can help you with the process and legalities.