Estate plans are comprehensive documents that provide clear direction for your loved ones and the court if you pass away or are unable to make informed decisions. These plans include provisions for what happens to your money, your assets, your children, and other aspects of your estate if you’re no longer able to manage them or care for them. And one key component that many people forget to establish in their estate plans is a power of attorney.
Your Illinois estate planning attorneys want you to know what power of attorney means and what happens if you fail to create a power of attorney in your estate plan. Here’s what you need to understand.
What Is a Power of Attorney?
A power of attorney is a legally binding document that gives someone you trust permission to act in your stead if you’re unable to act on your own behalf. These agreements give your appointed person the right to make decisions regarding your finances, medical care, and other similar aspects of your life.
These agreements can kick in permanently if you’re disabled and need someone to represent your interests or temporarily if you’re incapacitated after an accident. And you’re free to update your power of attorney at any time if you and the person you originally appointed are no longer comfortable with the agreement. It’s never too soon to appoint a power of attorney to oversee your affairs.
The Three Common Types of Power of Attorney
Though power of attorney agreements all let you appoint someone to oversee your affairs, there are different types of power of attorney that you can choose. And you’re free to choose different people for each type. Here are the three most common types of power of attorney that people tend to incorporate into their estate plan:
- General: General power of attorney gives a chosen individual the right to act on your behalf for all of your financial affairs. Typically, these agreements are used when you’re unable to make decisions on your own due to illness or emergency situations, but some of these agreements can be more permanent.
- Durable: Durable power of attorney gives your chosen individual the right to handle all of your affairs. This includes your finances, medical care, real estate, social security, and other similar concerns. Durable power of attorney typically only kicks in if you’re going to be incapacitated for a long time or on a permanent basis.
- Medical: Medical power of attorney gives someone the right to make decisions regarding your medical care if you’re unable to do so.
What Happens if You Don’t Appoint Someone?
If you don’t have a power of attorney established, the courts will appoint one for you. They effectively take the control out of your hands and can appoint someone you may or may not want to oversee your affairs.
If you’re not picky or you have siblings and family members you trust implicitly, this may not be a problem. But if you have loved ones who you don’t get along with or who you don’t trust to act in your stead, you risk ending up with them overseeing your affairs.
Why Letting the Court Make a Decision Isn’t Ideal
Remember, the court has no way of knowing if you trust the person they appoint. They simply rely on how the individual is related to you and whether they’re comfortable accepting the power of attorney over your affairs. The court has no way of knowing ahead of time if the person they choose will be responsible. This increases the risk of your money being used in a way that you would disagree with at best.
Legacy & Life Law Firm Is Here to Help
If you’re ready to create a power of attorney agreement so your affairs will be managed in a way you’re comfortable with, let the team at Legacy & Life Law Firm help. Contact us today to schedule a free consultation and get your estate plan started off on the right foot.