As you estate plan, it is also important to plan for incapacity. Incapacity planning is a far too overlooked, but critically important part of estate planning. After all, whether you are in good health or not, accidents can happen. Unexpected health issues can befall us. Incapacity is often both unexpected and devastating, but the situation can be greatly helped by putting in the effort to plan ahead.
One key legal tool in incapacity planning is the durable power of attorney. A power of attorney allows you to appoint an agent on your behalf who can be empowered to legally conduct and manage affairs for you. A power of attorney can be limited to a specific transaction or time period. It can be general and grant broad authority to the agent on a range of matters. It can also be durable. This means that the power of attorney will remain effective even in the event that the principal, the person who established the power of attorney, is rendered incapacitated. In fact, this durable power of attorney can be made springing, which means that it can be put in place, but won’t be effective until a certain event occurs, such as the incapacitation.
Durable power of attorneys are often put in place so that the principal has a trusted individual named as agent who will assume responsibility for the management of important things such as the principal’s finances in the event that the principal is incapacitated and unable to manage these things for themselves. With such a role of responsibility being bestowed upon the financial agent under a durable power of attorney, it is critical to take the time and think about who to select as your agent. Here are some things you should consider in making your selection.
Choosing the Right Financial Agent for Your Durable Power of Attorney
First thing is first, you may want to start the selection process on a more logistical basis. This means deciding whether you want someone who is local to be your power of attorney. With so much business occurring in the digital space, this is becoming less and less necessary. There are, however, some perks to a local power of attorney as they can look after in-person affairs such as home maintenance, local in-person meetings, and more. You will also want to consider the time availability of your potential agent. Someone who is already at capacity at work, in their family life, and more may not be the best selection for taking on one more thing.
Second, choose someone that you trust. The agent will essentially be stepping into your shoes to manage important things on your behalf. Pick someone that you trust with this. It is likely you will want someone who is organized and responsible. Managing finances is no small feat. It can be complicated and necessitate organization and punctuality to be effectively accomplished. They will likely be tasked with short term financial matters such as paying bills, but there may also be long-term decisions to make regarding your financial management. Selecting someone with some financial savvy may also be beneficial.
While you are selecting your financial agent for your durable power of attorney, you may also want to consider this individual for the role of personal representative of your estate. After all, having the familiarity with your assets gained from being your agent could be beneficial for these purposes. Furthermore, the qualities of the person you would select as your agent will also serve your purposes well for personal representative of your estate.
Estate Planning Attorney
For estate planning and incapacity planning, you can count on the dedicated team at E.A. Goodman Law to look out for your best interests. Contact us today.
Posted in: Estate Planning