Powers of Attorney
A power of attorney permits you to grant to another individual powers that normally
only you could exercise. The individual to whom you give these powers is known as
your agent or "attorney in fact". Despite the name, there is no requirement that
this person be a licensed attorney. It is important that any power of attorney designed
for estate planning purposes be a "durable" power of attorney. A power of attorney
that is not durable ceases to have any effect when you become incapacitated. In
the estate planning context, this is the exact time at which it becomes necessary
for a trusted friend or family member to have this power.
There are two types of durable powers of attorney that are executed for estate planning
purposes. A durable power of attorney for financial matters is designed to allow
your designated person to carry out your financial affairs during your period of
incapacity. A durable power of attorney for health care gives your designated person
(sometimes called a "proxy") the power to make health care decisions on your behalf.
The powers that you grant to your attorney-in-fact in each document may be as broad
or as narrow as you like. For example, in the durable power of attorney for finances,
the attorney-in-fact could be given only the power to pay your bills, or could be
given complete control over all your financial decisions. Additionally, the powers
that you give can take effect immediately, or can "spring" into existence at the
time of your incapacity.
It is important to note that powers of attorney are not a substitute for a trust.
In fact, the power of attorney loses its effect upon your death, and has no effect
on the distribution of your assets. These documents are ancillary to your living
trust. They do not individually satisfy your estate planning needs, but each comprise
an essential part of an entire estate plan.
This Web site is intended for general information purposes only. It does not nor is it intended to constitute legal, tax or investment advice. United Financial Systems, Corporation is not a lawyer, registered investment advisor or investment advisor representative, and is not engaged in the practice of law or the business of investment advice.