If you’re new to the whole estate planning process, then you might not be familiar with a couple of terminologies and you may need the assistance of an estate planning attorney PG County for that. Below are the things to know about power of attorney in estate planning.

Power Of Attorney

A power of attorney, also known as POA, is a legal document that allows another person, either someone from your family or even a friend, to make decisions and act on your behalf with a set of instructions.

A power of attorney is a common tool used in estate planning. It is easy and manageable and it’s very well-written with exact directions you want to be followed if you’re incapable of making decisions on your own.

In a power of attorney, you can nominate a person or entity to make decisions on behalf if you’re not able to. It can be drafted by your lawyer, however all the decision-making is for you to do such as which type of POA to choose and which person to pick for that job.

What’s written on a power of attorney is set in stone. No one can alter these directions because that’s the power of this document.

Here are some key terms that you need to remember about power of attorney:

• The person who is naming another person to be responsible for the personal and financial affairs, on their behalf, is known as the principal.
• The person who is in charge of carrying out the instructions and making decisions on the principal’s behalf is known as the agent or attorney-in-fact.
• A power of attorney is indeed a very influential document, but the person you appoint as the agent will have immediate power over your financial and other relevant things, so you need to be vigilant in choosing someone who will not take advantage of the situation and ensures that your assets are in safe hands.

When Does Power Of Attorney In Effect?

You never know when you will be incapable of making decisions on your own. Illnesses or accidents always come uninvited and you should be prepared for the worst. This is why planning and having a power of attorney is important. A good wills and trust attorney Upper Marlboro will suggest that you have a power of attorney already prepared even if you are capable of making your own decisions at that time.

The document needs to be made and tucked away, in dire need of quick action. At least you’ll be prepared when reality strikes you in the face.

A power of attorney can be made by anyone and everyone. It doesn’t depend on how much money you have in your bank account. It is a common misconception that people with millions of dollars are the only ones who need to have a power of attorney. Well, that’s far from the truth. Even if you have a couple hundred dollars in your name or the bank account, you’re eligible for a power of attorney.

The effect of power of attorney varies from type to type. In a general power of attorney, the decision-making ability is given to the agent from the moment the document is signed. Some power of attorneys can also take effect on if you ever get incapacitated.

Types Of Powers Of Attorney In Estate Planning

Healthcare POA

A healthcare POA is generally a document that allows the principal to hand over the medical decision-making to the agent. This happens when the former is struck with an ailment that compromises the thinking and reasoning ability. This is why trusted agents are required to make important medical decisions like DNR, resuscitation, etc.

Property POA

A property or financial power of attorney is just like it sounds. It’s a power of attorney that allows the agent to make important financial decisions on behalf of the principal, regarding the property and assets. If you want to sell them, how you want them to be divided after your death, if there are any taxes or debts that are left to be paid, etc., will all be managed by the agent.

Benefits Of Power Of Attorney In Estate Planning

Here are some amazing benefits of a power of attorney in estate planning:

Your Wishes Are Concrete

In a power of attorney, you can rest assured that your wishes or directions will be followed and executed. There’s no way anyone can alter what you’ve directed in the power of attorney, unless you’re the one who changes the terms, to begin with. Your wishes will be carried out exactly in the same way as they are penned in the document, so that’s a huge relief and a plus point about POA.

Streamline The Process

A power of attorney also makes the process a lot simpler, because it bypasses all of the court procedures. If there are clear and direct instructions provided by the principal in the power of attorney, then there’s no way that anyone will be able to scoot their way in between the dealings and delay the process.

Usually, courts are involved in processes that don’t have any directions from the owner of the assets or property and the judge has to follow a specific order when it comes to division of the assets among the beneficiaries. However, if there’s a power of attorney, then things are made simpler and quicker.

No Financial Issues

A power of attorney is not just a document with instructions on how to manage your dealings when you’re unable to. You can also get specific in the POA and even direct the agent to fulfill any remaining tax requirements, and overdue payments and even clear off any debts that are owed to anyone.

In this way, you will be clear of all the dues even though you might be seemingly “incapable”. A power of attorney gives you the freedom to make decisions and reach the other side with no financial burden looming over your head.

Protect Yourself

This is a general medical benefit, especially when you are suffering from a disease that alters your thinking and memory. Ailments like dementia, Alzheimer’s disease, and amnesia can be pretty bad. With a healthcare power of attorney, you can appoint someone you trust completely to take care of the medical side of things.

This also includes handing over decisions in critical times, like moving forward with surgery, methods of revival, etc. It protects you from being at the crossroads of not knowing what to do.

Very Versatile

A power of attorney is a very versatile document. There’s no right or wrong way to make a power of attorney. You can generally have it made according to your situation and then appoint an agent as decided.

You can also use it to direct your beneficiaries after your death, or you can also make it into a makeshift wall that will allow you to state your wishes and other directions regarding your assets and how they should be divided, without any hindrance or delay. It is an amazing addition when you’re planning an estate.

Conclusion

Power of attorney can change the way how you go about estate planning. It’s always a good idea to discuss things with your estate planning lawyer Largo and understand these things so you make the right decision at the right time.