As you sit down with your estate planning attorney and discuss the many aspects of creating an effective estate plan, he or she will likely mention the durable power of attorney as an estate planning tool. A power of attorney is a legal instrument that is used to delegate authority to another person. As the person signing the power of attorney, you are known as the principal. As the person receiving the authority granted by the document, your trusted loved one is the agent, also known as an attorney-in-fact.
Nine Types of Legal Authority Given Through a Power of Attorney
Unless your estate requires some unique situations to be addressed, many durable powers of attorney grant the agent powers such as the following:
- The power to buy, sell, pledge, encumber, and mortgage real estate.
- The power to make gifts.
- The power to amend your living trust.
- The power to access and manage your financial accounts.
- The power to execute documents on your behalf.
- The power to conduct your banking transactions.
- The power to invest your money.
- The power to make legal claims and conduct litigation.
- The power to deal with tax and retirement matters.
It is important for these powers to be spelled out in your durable power of attorney instrument in order to avoid the need for court involvement when your loved passes away.
Choosing which powers to give to your agent is a difficult and personal task. Fortunately, your estate planning attorney can help you make these decisions. We encourage you to reach out for guidance.