There are many different types of documents that people can draft as part of an estate plan. A will is often a good starting place. Individuals can choose a guardian for their children, clarify who inherits from their estates and select the personal representative who handles the probate process.
Some people may establish trusts to help improve their access to state benefits as they age or sidestep estate tax obligations after their passing. Many people also add documents that take effect in the event of an emergency rather than after a person dies. For many people, durable powers of attorney are invaluable estate planning inclusions. These documents help ensure that there is someone to handle financial matters on their behalf if they have a personal emergency.
Why do many people establish durable powers of attorney in addition to testamentary documents?
A lack of familial support
Children who have not yet turned 18t can rely on their parents to manage their resources in an emergency. People with spouses can generally expect their spouses to pay bills and manage their finances if they cannot do so on their own behalf. Once people turn 18, their parents cannot access their financial accounts without legal paperwork. Many people who have not married or who have divorced have no one to pay their bills and manage their resources if an emergency arises. Durable powers of attorney address that concern.
Concern about guardianship or conservatorship abuse
Adult guardianship is a way for other people to provide support to an individual who becomes permanently incapacitated. A conservatorship allows someone to manage an individual’s finances. Those left in a vegetative state after a car crash or experiencing cognitive decline caused by age may end up subject to a guardianship or conservatorship. Unfortunately, those who have become incapacitated cannot select the person who acts as their guardian because they lack legal capacity. By drafting durable documents before an emergency or cognitive decline, people can choose someone who they trust to handle their resources appropriately.
The need to protect key resources
Even in scenarios where people may have a spouse, their spouse may not be able to properly manage an investment portfolio or operate a business. Durable powers of attorney help ensure that the person who takes on that responsibility has the right skills and training to fulfill all of the obligations of the principal drafting the documents. The principal can name a business partner or a professional fiduciary to handle their affairs. Doing so can also take the pressure off of a spouse in what is likely to be a very difficult situation.
Adding a variety of documents to an estate plan can give people protection in difficult situations. The peace of mind that durable powers of attorney provide can be invaluable for those with financial obligations and high-value resources.