As West Palm Beach residents attend to their end-of-year estate planning affairs, many experts are advising that people pay special attention to a particular set of documents. Even for those who have not yet executed a will or trust instruments, professionals advise that everyone be certain to draw up or revise powers of attorney.
Two different powers of attorney play an essential role in every estate plan. The financial power of attorney authorizes a trusted individual to manage one's estate during times of incapacity. The appointed attorney can access bank accounts to make sure that bills are paid and investments are managed appropriately.
The medical power of attorney, also known as a healthcare proxy, authorizes someone to make critical care and treatment decisions on a person's behalf. The medical power of attorney can be used to provide instructions about a person's medical care and end-of-life preferences.
Experts caution that off-the-shelf powers of attorney may not be right for everyone. In order to serve its purpose effectively, a power of attorney should be drafted in a manner that accurately reflects one's wishes and, most importantly, is legally valid in accordance with state law.
One should make a careful choice about who will serve as the appointed attorney and give some real thought to how broad the powers granted to the attorney should be. Considerations like the attorney's authority to make gifts on one's behalf can have practical implications when it comes to effective financial management and estate tax liabilities. An experienced estate planning professional can help Floridians craft powers of attorneys that meet their individual needs.
Source: Investing Daily, "An Estate Plan Essential," Bob Carlson, Dec. 4, 2012