When you think about creating an estate plan, you probably think about a Last Will and Testament or a trust. However, an equally important part of your estate plan is the power of attorney (POA) document. A POA addresses matters that are not covered by a Will or trust. The POA document is applied while you are still living and it ceases to be effective upon your death (yes – that’s right, a POA terminates when the person dies!). As a result, it is an important document to have as part of your estate plan.
Don’t get confused when considering a POA. Many people think of their health care decisions when considering a POA. Under current law, a POA only works to assist you in managing financial affairs. An Advanced Health Care Directive (“AHCA”) is needed to assist in health care decisions.
When you appoint a POA over your property, it allows the appointee to have authority over your assets. This means your financial POA can access and manage your finances and also safeguard your assets. You can set forth what your appointee can and cannot do in the POA document. Most financial POA’s are granted broad authority.
It is important to understand that the POA document may provide that it is not effective until you are mentally incapacitated. You can also make it effective on the day you sign it. We usually recommend it be effective immediately, unless the person you are appointing is not someone you feel comfortable giving immediate authority. Whatever approach you take, it is essential that you appoint someone that you trust and that will have the ability to effectively manage your finances.
Advanced Health Care Directive
An AHCA can grant authority to another person to make medical decisions on your behalf if you are unable to make those decisions for yourself. This includes decisions regarding your medical care, hospitalization and long-term care. In some cases, your physician may have to determine whether you are unable to make medical decisions for yourself. Most of the time it is obvious.
Your AHCA provides you flexibility to set forth your wishes regarding end-of-life care or your wishes regarding certain treatments. The law requires that your express wishes govern your care and your health care agent must abide by your wishes as set forth in the AHCA. If your AHCA document does not address certain matters, your Agent will make the decision based upon what he or she believes is in your best interests.
If you are interested in learning more about power of attorney documents or other estate planning matters, call us for an appointment. The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.