Every day, you make important decisions affecting your present and future life. But what happens if you are unexpectedly incapacitated and unable to make these decisions? If you are thinking ahead, one option would be to prepare a durable power of attorney.
A durable power of attorney is an estate planning tool that allows one to authorize another to act on their behalf in the event that they can no longer make decisions or are otherwise incapacitated. But what exactly makes this tool important?
No need to go to court
If an individual has no appointed agent and becomes incapacitated, their family will have to go to court to seek a declaration of incapacity before they can take care of finances and other personal matters. Moreover, the court can appoint any family member or a temporary guardian, who can be a stranger, to make decisions for them. At least with a durable power of attorney, the principal can choose someone they trust.
Finances and business matters are taken care of
With a durable power of attorney, one can continue protecting their business and finances. Without this, the grantor can incur late fees, charges and penalties for failure to meet financial responsibilities and lose possible business opportunities. The principal can authorize the agent to:
- Manage regular transactions, such as payment of bills and filing tax returns
- Make necessary business decisions, such as buying and selling property
- Enforce any specific instruction in the durable power of attorney
These are some of the benefits of having a durable power of attorney.
In preparing for their future, an individual has to look into their needs and priorities when choosing the right estate planning tools for them. If they think that a durable power of attorney aligns with their goals, they should draft and include it in their estate plan.