When you hear mention of a power of attorney, you may feel as though it is not something that you would need as part of your estate plan. Most people are aware of the fact that in a general sense a power of attorney is used to allow someone to act on your behalf in a legally binding manner.
However, powers of attorney are in fact going to play a role in your estate plan if you want to be comprehensively prepared for the future.
It’s not all about arranging for the transfer of your financial assets after you die. Yes, this is a large part of what estate planning is all about, but it is also important to consider certain contingencies that you may face during your twilight years. Incapacity is one of them.
You can select your own hand-picked decision-makers by executing durable powers of attorney. A durable power of attorney differs from a standard power of attorney in that it remains in effect even after the grantor of the document becomes incapacitated. If you remove the durable designation, the attorney-in-fact will no longer be empowered to make decisions on behalf of the grantor in the event of the grantor’s incapacitation.
Depending on where you have the document executed, you may be able to utilize a springing durable power of attorney if you choose to do so. A regular durable power of attorney is going to go into effect right away. On the other hand, with the springing durable power of attorney the agent that you choose will not have the power to make decisions on your behalf unless you become incapacitated.
Many people are going through life without the proper estate planning documents, including durable powers of attorney to prepare for possible incapacity. When it comes to incapacity, a significant percentage of individuals simply feel as though they don’t have to worry about it because they will never become incapacitated.
Obviously, nobody wants to become unable to make sound decisions. However, in truth it is a very distinct possibility for anyone who is going to live a normal life span. Once you reach the age of 65, it becomes likely that you will live into your 80’s. Around 45% of elder Americans who have reached the age of 85 are suffering from Alzheimer’s disease. Alzheimer’s causes dementia, and dementia can strip you of your ability to make sound medical, financial, and personal decisions.
There is no reason to take any chances when you can prepare for the possibility of incapacity quite easily through the execution of durable powers of attorney. When you do so, you can proceed with peace of mind knowing that people you trust will be handling your affairs if it becomes necessary someday.
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