Powers of attorney are a valuable estate planning tool, but these documents need to be customized to fit your estate planning needs. Do-it-yourself power of attorney forms may include provisions that you don’t want, or they may be missing important clauses.
To make sure your power of attorney matches your estate planning objectives, only use a power of attorney that is drafted by an estate planning attorney. Discuss the following provisions when you are consulting with your attorney:
Make the Power of Attorney Durable
If you want your power of attorney to be used in the case of your incapacitation, you’ll need to make it durable. This requires including a provision stating that the power of attorney continues to be effective in the case of your incapacitation or mental incompetence.
You can also create a springing durable power of attorney. These powers become active only in the case of your incapacitation.
Naming Your Agent and Alternates
Name a power of attorney that you can trust. Beware of potential conflict of interests as well. If you are married and someone other than your spouse is named as your power of attorney, conflicts could develop in regard to joint owned bank accounts and other property.
You should also name an alternate power of attorney. If your primary agent isn’t available, then the alternate will have the powers listed in your document.
Authorize Specific Powers
You can choose to give your agent the authority to take any action you could take yourself. However, you may want to limit or specifically state the actions your agent can take.
The following are some common powers that you should carefully consider before adding to your power of attorney document:
- The power to make gifts. If you give this power, you may want to limit it in some way or give clear instructions regarding gift-making.
- The power to create, modify, or revoke a trust. You may be unable to avoid giving this power if you plan ahead and develop the types of trusts you need with your estate planning attorney.
- The power to change beneficiary designations. Plan ahead and name alternate beneficiaries if you want to avoid giving this power to your agent.
The power of attorney is one of the most valuable tools in the estate planning toolbox. Make sure your power of attorney gives your agent all the powers they need, but keep control of the financial issues you’ve already planned for by consulting with your estate planning attorney.
King Law Offices is a full-service law firm with an outstanding team of professionals who work diligently, creatively and compassionately on behalf of our clients each day. We serve the Upstate of South Carolina and Western North Carolina. Call 888-748-KING (5464) today for a consultation.