Planning for the future is never easy, especially when that involves thinking about end-of-life issues. Did you know, however, that discussing these concerns now can help you and your aging parents pave a clear path for the future?
Your parents should know about the importance of a power of attorney (POA). It is a crucial aspect of estate planning, albeit a complicated one. Let us discuss a few questions you can ask your parents, so you will know what to expect.
- When does your power of attorney take effect? A power of attorney transfers responsibility and decision-making powers from the grantor to an agent. When establishing the POA, your parent can specify when he or she wants the document to take effect. For instance, your parent has the ability to specify that it should only go into effect after he or she has become mentally incapacitated. This is called a durable power of attorney (DPOA).
- What responsibilities does the POA cover? If your parents have established a POA, you will want to discuss with them what authority they have granted the agent(s). There are different types of POAs, each with unique attributes. For instance, a POA for health care, otherwise known as a health care surrogate, assigns the right to make health care decisions. A financial POA covers the management of financial accounts and transactions specified in the document.
- Have you selected a trustworthy individual as your agent? Those tasked with the role of agent in a POA are empowered to address important matters on behalf of the grantor. Selecting an agent is not a decision to be taken lightly. Discuss with your parents who they have selected as a POA agent and really flesh out why they believe this person is qualified and trustworthy.
A power of attorney can only be granted by someone who is mentally sound. If there is any doubt that the grantor is unsound, the POA can be called into question. This is one of the many reasons that time is of the essence in estate planning. Have your parents put a POA and other legal protections in place before the need for them actually arises. For all of your estate planning questions, our office is here to help provide you with answers.