A power of attorney is important for situations in which you are unable to act or make decisions in your own best interest. These situations could include an accident, catastrophic illness, or a progressive condition. Some circumstances are more foreseeable than others.
If a court has to step in and appoint a guardian for you, it can cost over $3,000 or more depending on how often that guardian has to make reports to the court. No matter which kind of power of attorney you assign, it’s better to choose one yourself and plan for those expenses up front.
There are Two Types (and many variations) of powers of attorney for estate-planning purposes. The first is springing power of attorney. This type of power of attorney goes into effect only under certain circumstances, and the agent you choose is bound by these conditions. For example, you could assign a springing power of attorney to a loved one only in the event that you become unconscious due to accident or illness. Then, the agent you assigned would have to bring proof that you specified, such as the diagnosis of a coma, to take over and make decisions for you.
The other type of power of attorney is a durable power of attorney. It goes into effect the moment you sign and the agent does not need to prove anything to sign your name for you or make decisions for you.
You have the freedom to choose your acting agent. Trusted friends and relatives are a good option, but sometimes people choose a bank or lawyer to act as his or her agent. If you do choose a professional, you will need to negotiate payment.
Either way, your agent needs to be trustworthy, familiar with your wishes, be financially secure and be willing to make difficult decisions that impact you and your family.
Over the past 31 years, the Law Offices of Christopher A. Benson has helped more than 800 clients prepare and utilize simple and effective planning techniques to protect them and their families in order to avoid probate, save estate taxes, save money and save added emotional burden that comes from long term illness and/or death of a family member. Give us a call to schedule a free consultation to find out how we can help you and your family.