Estate planning comes with many questions. How do you want to structure trust distributions? Does a revocable or irrevocable trust make more sense to hold your assets? Who do you trust to act on your behalf to carry out your will? One of the most overlooked, but important, questions is: Do I need a durable power of attorney?
A durable power of attorney is a legal document used in estate planning (and under other circumstances) to appoint a trusted friend or family member to make decisions on your behalf if you become incapable of making those decisions yourself. There are many reasons you may be unable to do so: an accident that leaves you unconscious or physically incapacitated, a serious illness, mental illness or simply a decline in mental or physical acuity with age. A durable power of attorney comes into effect only when you become incapacitated during your lifetime.
So, do you need a durable power of attorney? As is often the case in estate planning, the answer is that it depends. Everyone is living with a unique set of circumstances, which is why you must take several factors into account in order to answer the question.
The first factor to consider is age. If you are getting older and would like to guarantee that health decisions or financial affairs are handled by someone you trust, then a durable power of attorney is a good idea. The fact is that the older you get, the more likely it is you may need someone to step in to help you. Setting up a durable power of attorney before you lose the ability to do so is a logical approach.
The second factor is your health. If you have a serious illness or condition that is likely cause your incapacity, a durable power of attorney is a good document to have in place. Making your medical requests clear (such as the extent of testing or treatment you are willing to undergo) allows your loved ones to carry out your wishes when you cannot.
Another factor is your financial health. If you have valuable or complex assets, a durable power of attorney can give your appointed agent the authority to manage your assets or make financial decisions on your behalf. A durable power of attorney can keep your financial life running smoothly if you are unable to handle your own financial affairs.
Finally, consider your relationships. If you have a spouse or close family member or friend, it may be prudent to select them as your agent because they likely will be able to handle your medical or financial affairs with your best interest and wishes in mind. If you do not have a trusted family member or friend who could serve as your agent, you may consider selecting a professional fiduciary to serve as your agent.
Questions about durable power of attorney? Want to know how it compares to a living will, healthcare power of attorney or non-durable power of attorney? The estate planning lawyers at Brown Law Firm can guide you through the estate planning documents and tools that are right for you. Call (303) 339-3750 to schedule a meeting.