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What role do powers of attorney play in an estate plan?

On Behalf of | Mar 29, 2024 | Estate Planning |

Modern estate plans can include an assortment of different documents. People often draft wills as their primary testamentary documents. Some people use trusts to pass their assets to others. Of course, estate planning is as much about the testator’s protection as it is about their legacy.

People may also consider their potential need for support in the future as they continue to age when putting together an estate plan. Powers of attorney are among the most popular additions to estate plans, and for good reason.

Powers of attorney address incapacitation

Death is not the only scenario in which someone may suddenly become unable to provide for their loved ones or manage their affairs on their own behalf. Some people experience medical emergencies triggered by traumatic incidents, like car crashes. Others have medical conditions that could worsen over time and leave them with compromised cognitive ability.

Powers of attorney take effect in a scenario where someone can no longer act on their own behalf. An inability to communicate, compromised cognitive abilities or a lengthy period of unconsciousness could all leave someone unable to get the healthcare they need or manage their finances. Powers of attorney give someone else the authority that a testator could typically exercise on their own behalf.

The agent or attorney-in-fact who they designate in their paperwork can potentially conduct business transactions, manage their finances or make medical decisions for the incapacitated person. Both financial and medical powers of attorney can provide crucial protection in scenarios where people cannot act in their own best interests.

Who needs powers of attorney?

Most legal adults could benefit from adding powers of attorney to their estate plans. Those who are over the age of 18 cannot rely on their parents or other family members to take those steps without powers of attorney authorizing them to do so. Any adult who does not have a spouse is in a particularly vulnerable position should they experience an emergency that renders them unconscious or incapable of managing their affairs.

Adding power of attorney paperwork to an estate plan can be a wise choice for someone who is concerned about safeguarding their interests and taking certain pressures off of their family members. Ultimately, comprehensive estate plans provide a great deal of protection from unusual but potentially devastating circumstances.