Many people believe estate planning consists of drafting a will to protect their assets and distribute them after they die.
While a will is a crucial document, a durable power of attorney may be just as or even more important to safeguard your hard-earned assets.
Durable vs. nondurable power of attorney
Under a general durable power of attorney, you authorize someone you trust to make legal, medical and financial decisions in line with your wishes if you become incapacitated by illness or mentally unfit to make those decisions yourself.
“Durable” means your agent’s authority to manage your affairs does not end when you can’t make your own decisions. On the other hand, a nondurable power of attorney is typically more specific and limited in nature and ends if you are incapacitated.
Avoid unnecessary anxiety and legal uncertainty
Creating a durable power of attorney while still healthy protects both you and your family. For example, if someone suffers a stroke and cannot communicate but doesn’t have a durable power of attorney:
- A doctor may have to declare them incompetent
- A family member may have to seek a guardianship
- A court filing must ensue, which goes before a judge
- The incapacitated person may have to appear in court
- Judges sometimes appoint nonfamily members as temporary guardians
- The court appointee could make all financial and life decisions until a final determination
You and your family can avoid these adverse possibilities by drafting a durable power of attorney. This is essential if you already know who you want to manage your affairs if such a circumstance arises. An attorney can help you decide how and when it becomes effective.
That’s significant because it means that you remain in control of your lifestyle and financial decisions unless or until a catastrophe happens. A durable power of attorney is an important element in a comprehensive estate plan, including a will, medical directive and revocable living trust.