Estate planning is essential, but can be confusing. There are so many different parts that you need to put together in order to create a plan that works. Including a durable power of attorney is just one of these parts, but it is just as important as any other component of it.
You may know what power of attorney and healthcare power of attorney is, but what is a durable power of attorney?
What is it?
Similar to a healthcare power of attorney, durable power of attorney gives another person the ability to make decisions and take other actions on your behalf.
However, while a healthcare power of attorney chooses someone who makes medical-related decisions, a durable power of attorney chooses an agent who makes business and financial-type decisions. If you do not have a durable power of attorney in place, the court may appoint someone to make these types of decisions for you.
This person can make choices and perform tasks such as close on a house, sign a contract or file your tax returns. They can also manage your retirement account or other investments. You can give your agent specific responsibilities or make their authority fairly broad.
How do you do it?
First, you must make this decision while you are in good physical and mental health. You will need to pick the person who will carry out these wishes while you are well-aware and able to make good decisions.
In some cases, you can elect to make your durable power of attorney and healthcare Power of Attorney agent the same person. However, you will need to create separate documents for each, regardless.
You will want to make sure this person is well aware of your decisions and will act in line with your wishes. This person should be able to act on your behalf, even when you cannot give any input.
Powers of attorney are an important aspect of your estate plan. Be sure to put the time and effort into creating these documents and selecting an agent who will serve you well.