CNBC conducted a survey and reported that 67% of Americans do not have an estate plan. The root cause of why they overlook it can be traced back to a variety of reasons. Young professionals may assume that it isn’t a priority because of their age and that they have ample time to create one. Others could hold the false position that they simply don’t have enough assets to warrant the costs of hiring an attorney.
If those last two statements reflect your position on estate plans, it may be because you aren’t aware that estate planning encompasses more than wills and choosing beneficiaries. Your estate plan is a series of documents your attorney selects to achieve your goals as well as protect you and your assets. One of those documents is a durable power of attorney, and everyone should have one.
What Is a Durable Power of Attorney?
The primary reason for a durable power of attorney is that a person of any age can suffer an accident, injury, illness or medical condition that results in their incapacity. If that were to happen, a durable power of attorney would allow the person of your choosing to manage your financial affairs.
When you create a durable power of attorney, you are granting someone (referred to as an agent) the ability to handle some or all of your financial matters. Based on the authority you grant, your agent can access your accounts, manage your bills, make investments, and even use your money to pay for your medical expenses. It is important to note that it does not permit the agent to make medical decisions on your behalf. Before, we mentioned that an estate plan is a collection of documents. In addition to a durable power of attorney, you will likely need to designate an agent in a medical power of attorney also—which could be the same person that holds your durable power of attorney. When you have both, you have assurances that your financial and medical decisions are taken care of by the person of your choosing when you cannot do so yourself.
An Important Limitation of a Durable Power of Attorney
As important as this document is, it is not a complete estate plan in and of itself. When you pass away, the durable power of attorney terminates. The agent no longer has the access they had when you were alive. Some people may fall into the false belief that because they are someone’s agent, then they have all the documents needed to handle someone’s affairs when they pass away. Additionally, the durable power of attorney can be revoked by the person who signed it or by a court if a guardian has been appointed for the incapacitated person.
Speak With An Estate Planning Attorney
At the Law Offices of Debbie J. Cunningham, PLLC, we help clients create estate plans that include both durable powers of attorney and medical powers of attorney. By having both documents in place, you will have the peace of mind in knowing that you have trusted people to handle your finances and medical decisions if you cannot do so on your own. For more information about our estate planning services, call us at (972) 292-7199 to schedule a consultation.
Law Offices of Debbie J. Cunningham
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