Power of Attorney Lawyer
As we grow older, it is important to plan for the future and protect our assets. One way to do this is by creating legal documents that can help manage our affairs in the event we become unable to do so ourselves. Two common legal documents that people use for this purpose are power of attorney and trust or will. While they may sound similar, they have different functions and purposes. In this blog post, our friends at K. Kelso Law discuss what power of attorney is and how it differs from a trust or will.
What is a power of attorney?
A power of attorney is a legal document that grants someone else the authority to act on your behalf in specific situations. This person is called an agent or attorney-in-fact. The power of attorney can be limited or general, and can be used for financial or medical decisions. For example, you may grant a power of attorney to a family member to handle your financial affairs if you become incapacitated or unable to do so yourself. A power of attorney can be revoked at any time as long as you have the capacity to do so.
A trust, on the other hand, is a legal arrangement that allows you to transfer your assets to a trustee to manage for the benefit of yourself or others. There are many different types of trusts, but they generally fall into two categories: revocable and irrevocable. A revocable trust allows you to retain control of your assets during your lifetime and can be changed or revoked at any time. An irrevocable trust, once established, cannot be changed or revoked. Trusts can be used for a variety of purposes, such as avoiding probate, minimizing estate taxes, and protecting assets from creditors.
A will is a legal document that outlines how you want your assets to be distributed after your death. A will can also name an executor, who will be responsible for carrying out your wishes. Unlike a power of attorney or a trust, a will only goes into effect after you die. It can be changed at any time as long as you have the capacity to do so.
Why are power of attorneys important?
Here’s an example of a scenario where a power of attorney can be useful. Let’s say someone in your family is planning to travel abroad for an extended period of time and asks you to handle their affairs while they’re away. This means they appointed you as their agent and you now have the power to make decisions on their behalf, such as managing their finances, signing documents, or even making medical decisions if necessary.
In summary, a power of attorney is a legal document that grants someone else the authority to act on your behalf in specific situations, while a trust is a legal arrangement that allows you to transfer your assets to a trustee to manage for the benefit of yourself or others. Having a power of attorney is useful in many situations where the principal is unable to act or make decisions on their own such as due to illness, disability, or absence. A will is a legal document that outlines how you want your assets to be distributed after your death. Each of these documents serves a unique purpose and can be an important part of your overall estate plan. No one likes surprises, that’s why it is so important to start estate planning with a power of attorney lawyer as soon as you can to avoid any conflict and take control of your assets.