Post By: Dana Sunderlin
One of the most important aspects of estate planning is appointing a power of attorney. A power of attorney gives one, or more than one, person the ability to act on your behalf. There is no special qualification for who becomes your power of attorney, other than the fact that they cannot be a minor; however, many people generally choose a spouse or child. What is most important is that it is someone that you can trust.
A general power of attorney usually includes the power of that person to: handle banking transactions, enter safety deposit boxes, handle transactions involving U.S. securities, buy and sell property, purchase life insurance, settle claims, enter into contracts, exercise stock rights, buy or sell real estate, file tax returns, and handle matters related to government benefits. You also have the ability to grant them additional powers, including maintain and operate business interests, employing professional assistance, making gifts, making transfers to “living” trusts, and disclaiming interests.
In addition to a general power of attorney, you can also appoint a special power of attorney, a durable financial power of attorney, or a health care power of attorney. A special power of attorney authorizes your agent to act on your behalf in only very specific situations. A Health Care power of attorney allows you to appoint someone to make health care decisions for you if you’re incapacitated. Most importantly, a “Durable” power of attorney comes into effect only if you become mentally incompetent.
It is important to note that a power of attorney ends automatically at your death. Therefore, if you want them to be able to handle your affairs after death, such as making burial and funeral arrangements or transferring your property to the people who inherit it, you must also name them as your executor. A power of attorney may also end if you choose to revoke, or if it is your spouse and you get a divorce.
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