A power of attorney is one of several common documents included in estate plans. Unlike most documents that take effect after your death, this one is active while you are still living. It is important to understand the purpose of a power of attorney in MA estate plans before deciding to include one in yours.
What Is a Power of Attorney
A power of attorney grants another individual authority to manage your financial affairs. This includes accessing your bank accounts, credit cards, tax returns, etc. Essentially, the person you designate will be able to do anything and everything financially on your behalf including accepting payments and paying bills.
There are two types of Power of Attorney. A “immediate” one is effective when signed and the agent has immediate authority. A “springing” one is activated only when you become disabled or incapacitated (as verified by a medical professional). This is an important distinction, which we will discuss further below.
Benefits of Power of Attorney
In most cases, when one becomes injured or disabled, it happens unexpectedly. Without a power of attorney, family members must petition the courts for conservatorship. This can take time, during which your finances will be left unattended. Bills could be left unpaid, making you subject to eviction, foreclosure, penalties, and accrued interest. Having a power of attorney established in advance allows someone that you trust to immediately step in and address those day-to-day financial matters. Thus, it can be a very valuable tool in managing your estate.
Purpose of Power of Attorney in Estate Plans
Most people think of estate plans as covering only your death. In truth, it is meant to protect your interests even in cases where you become disabled or incapacitated (such as being in a coma after an accident). A power of attorney achieves that goal. It becomes invalid upon your death and other estate plan instruments then take effect.
In choosing between the two options, immediate and springing, many opt for immediate. Since a springing power of attorney requires verification from a medical professional, it still results in some delay. This almost defeats the purpose of having a power of attorney to begin with. However, this decision also depends on your personal circumstances and comfort level.
Assistance with a Durable Power of Attorney in MA
Ultimately, the purpose of a power of attorney is to help achieve your overall estate planning goals. It should not be enacted on its own or without consideration of other legal documents that you have in place. Contact our team of Massachusetts estate planning attorneys to schedule a consultation. By taking the time to understand your goals and circumstances, we help you make important decisions about a power of attorney and other estate planning measures.