META: Are you worried about dying without having a plan in place? Estate planning is important because it helps ensure that your family members get what they deserve after they die.
Estate planning involves setting up legal documents that outline who gets what after you die. These include wills, trusts, powers of attorney, health care directives, and living wills.
There are three main types of estate plans:
3. Powers of Attorney
Let’s take a look at each one.
A will is a document that lets you name someone to be the executor of your estate (the person or people who handle all the details of how you want your assets distributed). You can also name beneficiaries for life insurance policies, retirement accounts, and other assets. The executor has certain responsibilities when you die.
A trust is an agreement between two parties — usually called “trustors” and “beneficiaries” — where one party transfers property to another party in exchange for something in return. For example, if you give money to charity, you could set up a charitable remainder trust. This would let you transfer money to a trustee who then gives away the money to charities over time.
Powers Of Attorney
A power of attorney allows you to designate someone else to make decisions on your behalf while you’re incapacitated. For example, you might appoint a friend or relative as your agent so he/she can pay bills and manage financial affairs.
The best way to protect yourself from becoming a burden to your loved ones is by creating an estate plan. It’s never too early to start thinking about your future.
What Is A Power Of Attorney And How Does It Work?
A power of attorney is a legal document that lets you delegate some of your rights and duties to someone else. In most states, a power of attorney must be signed before it takes effect. A power of attorney may allow you to do things like:
• Pay bills
• Make medical decisions
• Manage your finances
• Give gifts
• Sign contracts
• Sue others
• Get married
• Be appointed guardian
• Take out loans
• Buy real estate
• Do anything else you choose
Who Can Have A Power Of Attorney?
You can have a power of attorney only if you’re 18 years old or older and mentally competent. If you don’t have power of attorney, you can still sign contracts, sue others, and make medical decisions. But you won’t be able to make any other major decisions.
How Long Does A Power Of Attorney Last?
Most states require that a power of attorney last until you become incapacitated. Incapacitation means being unable to carry out normal activities due to illness or injury. Some states say that a power of attorney lasts for a specific time, such as 5 years. Others say that the power of authority expires automatically once you reach a specified age, such as 21.
What Are The Benefits Of Having A Power Of Attorney?
Having a power of attorney can help you avoid becoming a burden to your family members. When you have a power of attorney:
• You can get services without having to ask anyone else for permission.
• You can take care of your personal needs.
• Your family doesn’t need to worry about paying bills or managing your finances.
• You can hire someone to provide care for you if you become ill or injured.
• Your family won’t have to deal with probate court proceedings.
• Your family can sell your home without going through probate court.
• You’ll be able to leave funds to charity without worrying about taxes.
• You can change beneficiaries on life insurance policies.
• You can name guardians for minor children.
• You can make changes to your will.
• You can create trust.
• You can add more people to your existing power of attorney.
• You can revoke a power of attorney at any time.
When Should I Create My First Power Of Attorney?
If you want to avoid problems later, you should create your first power of attorney when you are young and healthy. This gives you the flexibility to change your mind later in life.
If you already have health issues or disabilities, you may not be able to use all the powers granted under a general power of attorney. Talk to your lawyer about what types of powers you need.
What Should You Do Next?
Staubus and Randall‘s Dallas estate litigation lawyers are prepared to help you if you are dissatisfied with the administration of an estate after a loved one’s death. You can find them here: https://www.srllp.com/