Oftentimes people are very concerned about making sure that they have a will but do not think about a power of attorney. While it is an important part of an estate planning process, and is critical if you have specific goals and desires on how you would life your life’s savings distributed upon your death, without one your closest relatives will still receive your assets under the intestate laws. If you are married, this means your spouse. The state does not take your assets unless and until there are no living relatives.
A power of attorney, however, has no fall back provision. If you do not have a power of attorney when you need one, your loved ones will have to petition the court and ask to be appointed as your guardian. This can be an expensive and time consuming process. A power of attorney, unlike a will, is a document that takes effect while you are living. It gives power to whomever you choose to handle your financial affairs, including paying your bills, signing checks, even selling your property. You can use a power of attorney while you are still capable of handling your affairs but are unavailable or you can use it solely in the event that you become you incapacitated and are no longer able to handle your affairs. Some people will use one if they are out of state and need to sell their house. They can designate a power of attorney to handle the transaction for them at settlement. A power of attorney can specify what rights and power you give the other person and it can be limited to specific things.
It is a very powerful, but often overlooked document. You should trust fully the person you designate as it can be abused. You can revoke it in writing at any time. It can be used for many different reasons. If say, for example, you have a child in college and you want information on their account with school or grades, you can talk to your child into signing a Power of Attorney to allow you access to this information. So many parents are frustrated when they pay college bills and yet the school will not even tell them the balance due. It is a very useful tool in the event of an unfortunate and tragic accident that does not result in death. If the breadwinner is suddenly not available, rather than have to file a petition and wait for court, a Power of Attorney will enable the spouse to handle all the affairs, negotiate checks, obtainformation on the mortgage and other bills that may only be in the other person’s name.
The cost of a Power of attorney is very inexpensive (approx. $ 100) compared to the cost that will be incurred if someone does not have one when it is needed (thousands). It is something to think about to protect yourself while you are living or assist your loved ones.
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