Powers of Attorney are a crucial estate planning document and are a critical step in planning for incapacity. A power of attorney allows a person you appoint the written authorization and power to act on your behalf in business, legal, financial, and medical matters. This is usually a trusted family member. If the right power of attorney is put in place, then once incapacitated, the agent (or person appointed under the power of attorney) can step in and take care of the principal’s legal and financial affairs. Without the right power of attorney – or any at all – the incapacitated individual’s family would need to go through the justice system to have a guardian or conservator appointed to represent them.
A power of attorney may be limited or general. A limited power of attorney may only give someone a specific right or two – perhaps the most common place you’ll see a limited power of attorney is in purchasing a car or real estate. Car dealers will often have you sign a limited power of attorney granting them the authority to complete the transaction at the local county clerk. Additionally, you might give someone the authority to sign a deed to property for you on a day that you will be out of town. A general power is comprehensive and usually grants your agent all the powers and rights that you have yourself. This can include allowing your agent to make bank transactions, sign checks, apply for disability, or simply pay your bills.