Powers of Attorney
Power of attorney creates an authorization for an individual to act for someone else. You can put a power of attorney into effect for a variety of reasons, such as for healthcare, finances, or legal matters. If you are considering creating one, it’s essential to understand the different types of powers of attorney, the process of creating one, and how they can be used in estate planning.
At Peck Ritchey, LLC, we understand the importance of including a power of attorney in your estate plan. Many people worry about their mental capacity and ability to carry out their normal functions as they age. Our legal team has extensive experience in creating powers of attorney for clients and guiding them through the process. We can provide you with the needed guidance to create a power of attorney that meets your specific needs.
Types of Powers of Attorney
A power of attorney allows someone to act for another person, known as the principal. The agent or attorney-in-fact appointed in the document can be given broad or limited powers to make decisions and take actions on behalf of the principal. Here are some different types of powers of attorney:
General Power of Attorney
A general power of attorney gives the agent broad powers to manage the principal’s finances, sign legal documents, and handle their property. The agent appointed in this type of power of attorney can act on behalf of the principal until the power of attorney is revoked or expires. This type of power of attorney is useful when the principal is out of the country or unable to handle their affairs for any reason.
Limited Power of Attorney
A limited power of attorney restricts the agent’s authority to a specific task or set of tasks. For example, a principal may create a limited power of attorney to authorize someone else to sell their property or sign a contract for them while they are out of the country. This type of power of attorney is usually time-limited and automatically expires once the task is complete. It is useful when a principal wants to delegate a specific task to someone they trust but does not want to give them broad powers over their affairs.
Durable Power of Attorney
A durable power of attorney is effective even when the principal becomes incapacitated. This type of power of attorney can be general or limited in nature. It is useful when the principal wants to ensure that their affairs will be managed by someone they trust in case they lose the ability to handle their affairs due to illness, injury, or any other reason.
Healthcare Power of Attorney
A healthcare power of attorney, also sometimes called a healthcare proxy, allows someone to make healthcare decisions for the principal if they become unable to do so themselves. This type of power of attorney is important for individuals who want to ensure their healthcare decisions are made in accordance with their wishes. The agent appointed in a healthcare power of attorney can make decisions about the principal’s medical treatment, including decisions about life-sustaining treatment, if the principal is unable to do so themselves. A healthcare power of attorney can be a standalone document or part of a broader estate planning strategy.
In summary, powers of attorney are legal documents that allow someone to act on behalf of another person. Different types of powers of attorney are available, including general, limited, durable, and healthcare powers of attorney. Each type serves a certain purpose and is useful in different situations. It is essential to work with a qualified attorney to ensure that your powers of attorney are drafted and executed properly to meet your personal or business needs.
Creating a Power of Attorney
To create a valid power of attorney, the principal must have the legal capacity to do so. This means that they must be of sound mind and understand the legal implications of creating a power of attorney.
The principal must also select an agent to act on their behalf. The agent must be a trusted and competent individual who is willing to accept the responsibility. The agent must also be at least 18 years old and not have a conflict of interest with the principal.
Once the agent is selected, the principal must decide on the type and scope of the power of attorney. They may choose to create a general or limited power of attorney. The principal must also decide if the power of attorney should be durable, meaning it remains in effect if they become incapacitated.
The principal and agent must both sign the power of attorney document in the presence of a notary public. This makes the power of attorney a legally binding document.
Using Powers of Attorney in Estate Planning
Powers of attorney are an important part of estate planning. By creating a power of attorney, the principal can ensure that their affairs will be managed by someone they trust if they become unable to do so themselves.
Powers of attorney can also be used to avoid the need for guardianship proceedings. If the principal becomes incapacitated and does not have a power of attorney in place, a guardianship proceeding may be necessary to appoint someone to manage their affairs. This can be a time-consuming and expensive process. By creating a power of attorney, the principal can avoid the need for a guardianship proceeding.
In addition, a power of attorney can be used to manage assets during incapacity.
Contact Peck Ritchey, LLC for Your Estate Planning Needs
At Peck Ritchey, LLC, we understand that estate planning can be a complex and overwhelming process, which is why we are here to help. Our experienced legal team is dedicated to providing personalized and comprehensive estate planning services to meet the unique needs of our clients.
Our firm offers a wide range of estate planning services, including creating wills and trusts, establishing powers of attorney, developing healthcare directives, and planning for special needs individuals. We work closely with our clients to understand their unique situation and develop a customized plan that meets their individual needs.
If you need assistance with estate planning, our attorneys are here to help. Contact us today at (855) 328-5787 to schedule a consultation with one of our experienced estate planning attorneys. We serve clients in Cook County, Lake County, Kane County, and DuPage County.