A power of attorney is a legal document that is used to allow someone to act on your behalf in a legally binding manner. The person acting as your representative would be called an agent or attorney-in-fact. You do not have to give the agent the power to act for you under all circumstances.
It is possible to create a limited power of attorney. As the grantor of the device, you can decide on the limits of the power that you want to give to the agent. You could allow the agent to make a single transaction on your behalf, or you could empower the agent to sign certain types of documents for you.
A limited power of attorney could also be used to give someone the power to act for you for a limited amount of time.
Durable Powers of Attorney
Within the realm of estate planning, durable powers of attorney are commonly used to prepare for latter life incapacity. Many seniors become unable to handle all of their own affairs at some point in time, and you can plan ahead proactively by naming representatives to act for you through the execution of durable powers of attorney.
You could use a durable financial power of attorney to name someone who is a good money manager to handle your monetary assets, and you could name a medical decision-maker if you execute a durable power of attorney for health care.
These documents can be valuable, but there is a limitation to take into consideration. Let’s say that you execute a durable power of attorney for financial matters, and you do become incapacitated. The agent that you choose would be handling your financial affairs, so this individual would have a total understanding of your financial situation.
Logically, the person would be well-positioned to administer your estate after you pass away. However, a power of attorney of any kind would no longer be in effect after the person granting the power dies. This is a limitation that would enter the picture if you use a durable financial power of attorney to name a financial manager.
A more comprehensive solution could be implemented. If you were to use a revocable living trust as a vehicle of asset transfer instead of a will, you could empower a successor trustee to handle the trust in the event of your incapacitation. This person or entity could also be empowered to administer the trust after you pass away.
Take Direct Action
If you have questions about estate planning matters, we can provide answers. Our firm offers free consultations, and you can send us a message through our contact page to set up an appointment: Grand Forks ND Estate Planning Attorneys.