Typically, when considering an estate plan you probably think about a will and possibly a trust. After deciding what you will leave behind for loved ones, these documents nominate those you have chosen to handle important matters after you pass away.
An estate plan can also include documents that will impact your end of your life care. These are powerful documents, and you should consider them carefully.
Here’s what you should know about a Power of Attorney (POA) and whether you should have one.
What can a POA do?
In general, executing a power of attorney gives someone the authority to act on your behalf as if they were you and according to your wishes. There are different Powers of Attorney depending on a person’s anticipated purposes, including:
- General
- Durable
- Limited
Depending on the type you choose, a POA can give someone significant power and control over your legal and financial matters.
Do you need one?
The most common concern people typically have concerning a power of attorney is the potential for abuse. A POA is a powerful document that can allow someone to access your account information, transfer and obtain your funds, and even change your beneficiary designations.
Before you decide whether you need a POA, you should determine what you want such a document to accomplish. If you conclude that you want to give someone power of attorney, consider limiting the document(s) to specific matters. When a POA document is too general or the powers included are overly broad, you run the risk of having little to no recourse if the named person acts in a way detrimental to you or contrary to your wishes.
The contemplation, drafting, and ultimate execution of a power of attorney are extremely important matters. Talk to an experienced professional about your goals and how you can accomplish them effectively and with peace of mind.
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