A power of attorney is a document that you have probably heard about at some point in time. With a power of attorney, you give another individual the ability to enter into legally binding agreements for you.
There are different types of powers of attorney that are used for various different purposes. One type is the general power of attorney. You would use this document to give the representative (who is called an agent or attorney-in-fact) the latitude to act for you in virtually every way.
Without question, this is a lot of power to give to someone else, and it can be a bit disconcerting. At the same time, sometimes it is necessary.
It is also possible to create a limited power of attorney. This document is somewhat self-explanatory: you use a limited power of attorney to give an agent the ability to act on your behalf on a limited basis.
Durable Powers of Attorney
There is a type of power of attorney that is used in the field of estate planning called a durable power of attorney. You would use a durable power of attorney to account for the possibility of incapacity.
The major advantage that you gain with a durable power of attorney is the avoidance of a guardianship proceeding. If you do nothing to prepare for possible incapacity, and interested parties feel as though you have become unable to handle your own affairs, a guardianship hearing could be convened. The state could ultimately appoint a guardian to act on your behalf.
On the other hand, if you have durable powers of attorney, hand-picked decision-makers that you personally empower would be able to handle your affairs in the event of your incapacitation.
The reason why we are using the plural is because there are different types of decisions that could present themselves. There could be health related decisions, and there would also be financial decision-making.
You may want a particular person to make health care decisions on your behalf, and a more financially minded person to handle your financial affairs. To satisfy this objective, you could create a durable power of attorney for health care (sometimes called a health care proxy) along with a durable financial power of attorney.
Importance of Incapacity Planning
When you hear about durable powers of attorney and incapacity planning, you may tune out under the assumption that you will probably never become incapacitated.
In fact, 45 percent of people who are at least 85 are suffering from Alzheimer’s disease, and Alzheimer’s is not the only cause of incapacity.
Prudent individuals should certainly prepare for this contingency in advance. If you are convinced, contact us through this page to set up a free consultation: Southampton PA Incapacity Planning Attorneys.
- What Is the Difference Between a General and a Limited Power of Attorney? - May 24, 2015
- What Is a QDOT Trust? - May 22, 2015
- Do You Have to Impoverish Yourself to Qualify for Medicaid? - May 19, 2015
