When planning how to handle an estate, some people may want to consider whether granting another person certain powers to act on their behalf is advisable. People are able to draw up legal documents granting power of attorney, which gives a third party the ability to act on the grantor’s behalf.
People can assign the agent a wide variety of powers, including the ability to make either limited or broad financial decisions, medical decisions, transfers of property, trust creation and other assorted powers. Powers of attorney can be quite limited in scope, applying to only a specific transaction, or very broad, covering a wide range of financial affairs. While an agent may not draft a will or change a will for the grantor, they can, he or she may be able to create a trust in the grantor’s name, place property and assets in the trust, give property to others as a gift and changing the ownership to assets.
People create powers of attorney for several reasons. They may wish to set one up that is contingent upon them no longer being able to make decisions for themselves. Other people may wish to grant such powers to a trusted agent so the agent can appear on their behalf in order to complete transactions for them without them having to appear personally.
As the powers can be quite broad, it is important to be very careful when drafting a power of attorney, making certain only the powers people wish to grant are included. People who are considering granting another person power of attorney to act on his or her behalf may wish to speak with an estate planning attorney. An attorney may advise their clients on the advisability of granting such powers.
Source: American Bar Association, “Power of Attorney“, December 03, 2014
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