Estate Planning: Power of Attorney

Power of AttorneyThe proper planning of your estate is one of the most important things you can do to ensure your wishes are met following your passing. When a loved one dies, the last thing you should be immediately focusing on is the division of their wealth and assets. However, some aspects of estate planning are important even before your passing. As such, one of the important issues that you must address (along with wills, trusts, etc.) is power of attorney. Power of attorney is a legal authorization that, in writing, allows for another individual (the agent) to act on behalf of the principal.

Power of attorney can vary based on the jurisdiction you are in, and the type of power of attorney authorization you choose. Within the jurisdiction of the state of California, there are four possible power of attorney documents that can be utilized, which are Durable, General, Limited, and Medical Powers of Attorney.

Durable power of attorney is one that authorizes the agent to make financial decisions for the principal, even following the principal’s incapacitation. General power of attorney differs in that the agent is afforded authority to make decisions on a vast number of legal issues for the principal.

 In comparison to these two powers of attorney, limited power of attorney is set up to only authorize the agent to make decisions on certain key issues, as set out by the principal. Limited power of attorney is useful for when an agent represents your interests during a single transaction or for a specific duration of time. Another more specific power of attorney is medical. In the event of being incapacitated or unable to communicate decisions, the agent is authorized to decide on the principal’s treatment options.

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