A huge part of estate planning is preparing for the unexpected. This includes what will happen to you and who will make decisions if you are unable to make them for yourself. That’s where your power of attorney steps in.
What is power of attorney?
Power of attorney is a legal document that names an individual as responsible for and able to make decisions on your behalf. You may appoint them to make decisions concerning your health and medical care or your finances and assets. Here are some types of power of attorney to consider:
- Durable power of attorney – Power of attorney that comes into effect when you become unable to manage your own affairs.
- General power of attorney – Power of attorney that manages your business.
- Special power of attorney – Power of attorney that makes a particular business decision for you.
- Irrevocable power of attorney – Power of attorney that you cannot change or revoke.
Why do I need power of attorney?
Contrary to popular belief, even married couples need to establish power of attorney. In assuming that your spouse will have the ability to make necessary decisions without being your power of attorney, you could create significant legal issues.
If you have assets that are in your name and not your spouse’s, they may need power of attorney to be able to take ownership of them. If property is owned jointly by the both of you and you are still living but incapacitated, your spouse will need power of attorney to make decisions concerning those assets without your approval.
If you do not have your spouse named as your official power of attorney, they may not have the decision-making rights in terms of healthcare that you would like them to.
You can actually have more than one power of attorney. So, you can choose your spouse as one and another person that you trust as the secondary power of attorney. This can be helpful in ensuring that no matter what happens to you and your spouse, you know who will be making your decisions.