While most people regard the purpose of an estate plan as providing clear directives for how assets and possessions should be handled after one’s death, a comprehensive plan must also account for the unknowns and unexpected events that may arise during one’s lifetime. For example, it’s important to consider who would take care of one’s financial obligations in the event that he or she was involved in a serious accident and became incapacitated or disabled.
To help prepare for the unexpected, an individual would be wise to provide one or more individuals with power of attorney. In the event an individual becomes incapacitated, due to impairments that occur from an injury or as part of the aging process, the individual who has been given power of attorney can make important decisions on one’s behalf.
For example, an individual given power of attorney rights can make decisions and act on one’s behalf with regard to financial matters, charitable donations and gifts and in healthcare decisions. Given the important role that an individual given power of attorney must play and fulfill, it’s imperative that he or she is trustworthy and, at all times, acts in good faith.
To help ensure that an individual in this role fulfills his or her fiduciary duties, it’s wise to include language that requires the accurate keeping of records and restricts or limits the giving of monetary or other gifts. At times, family members may challenge the decisions made by an individual who has been given power of attorney and may even take legal action to have this power taken away. There are, however, steps that an individual can take to safeguard against this type of potential legal action.
Individuals who wish to discuss their estate planning goals with an attorney would be wise to also address matters related to long-term care planning and designating a power of attorney.
Source: Caregiverslibrary.org, “What Is Power Of Attorney?,” Oct. 13, 2015