A power of attorney and a last will are important documents in estate planning.
A last will and testament is a document that allows you to decide who will inherit your assets after you die. The testator(you), select who your heirs will be. You also name an executor or someone who will handle distributing your assets based on your wishes. These documents must be signed in front of a witness.
What exactly is a Power of Attorney
A power of attorney is a document giving someone you choose the authority to act on your behalf if you can no longer make decisions on your own. The principal(you) gives the authority to the agent, also known as the attorney-in-fact.
There are three types of power of attorney.
General Power of Attorney
This person has the authority to act on your behalf in a wide range of matters. They include buying and selling real estate, managing your banking and investments, paying taxes and handling lawsuits, and operating a business.
Limited Power of Attorney
Also sometimes referred to as a special power of attorney, this gives someone the authority to make decisions in a restricted capacity as you specify in the document.
Medical Power Of Attorney
This type of power gives someone the authority to make medical treatment decisions in the event that you are unable to make them for yourself.
What Makes a Power of Attorney "Durable"?
A power of attorney can be canceled in four scenarios: 1) you specifically revoke it, 2) if you die, 3) if you become mentally incapacitated 4) if it has an expiration date. The word “durable" means that the power of attorney continues to be effective after you become mentally incapacitated. Being mentally incapacitated means that a person no longer has the mental ability to make informed decisions or is unable to communicate those decisions. This can also be due to disease, or an injury such as one resulting in temporary unconsciousness or a coma.
It is largely recommended that you create a power of attorney and a will at the same time. The power of attorney protects you and your family during your lifetime. The will provides protection after your death. Together they provide a powerful peace of mind. It is never too soon to create these. Stoddard & Funderburk are ready to help. Contact us today to get started.
