When you hear the phrase “estate planning,” you might think of extremely wealthy people meeting with their lawyers and accountants to create wills and trusts that will facilitate the transfer of assets from one generation to the next. However, there is much more to estate planning than just wills and trusts. More importantly, estate planning is not just for those with extensive assets or complicated investments. Every adult should have an estate plan of some sort in place as a measure of protection in the event of a tragedy.
One estate planning tool that is often overlooked or misunderstood is the power of attorney. A power of attorney can be extremely useful in protecting your best interests should the unexpected occur.
Power of Attorney Basics
Using a power of attorney document, a person—called the principal—can appoint another individual to serve as his or her agent in financial matters. Illinois law also recognizes powers of attorney for health care which give agents the authority to make medical-relate decisions for the principals.
Not all powers of attorney are meant to be used for estate planning purposes. In fact, powers of attorney that are limited and non-durable are decidedly not very useful for estate planning, but they are effective in other areas. For example, assume you are involved in a negotiation regarding an important business matter, and the resulting contractual agreement requires your signature. You could use a limited, non-durable power of attorney to give your selected represented the authority to sign the document on your behalf.
Durable Powers of Attorney
So, what is the difference between a non-durable power of attorney and a durable power of attorney? The biggest difference is a rather important one: a non-durable power of attorney becomes void if the principal becomes incapacitated or unable to make decisions for himself or herself. A durable power of attorney, by comparison, will remain in effect after the principal’s incapacitation. As a matter of fact, many people set up their powers of attorney to only go into effect if they become incapacitated. These types of durable powers of attorney are sometimes referred to as “springing” because they only take effect under specific conditions.
Speak to a DuPage County Estate Planning Attorney About Your Options
At A. Traub & Associates, we understand that you may have many questions about powers of attorney and the estate planning process, and we are equipped to help you find the answers. Call 630-426-0196 to schedule a confidential consultation with one of our knowledgeable Lombard power of attorney lawyers today. We will assist you in developing an estate plan that gives you and your family the peace of mind that you deserve.