The end of the year is a time that many Maryland residents take to reflect upon the events and choices made during the past year, and focus on plans for the coming one. Many estate planning experts suggest that this time of year is ideal for reviewing one's plan, or for beginning the estate planning process. An annual check of these vital documents ensures that the stipulations within are still aligned with the wishes and intent of the principal. One recent report also suggests that many may want to consider adding power of attorney (POA) documents, if they are not already in place.
A power of attorney involves the legal assignment of decision-making responsibility. These powers can begin at the time of signing, or can come into effect if and when the principal becomes unable to act in his or her own behalf. No matter how they are drafted, the most essential part of assigning a POA is to make a wise choice in determining who deserves this level of trust. A POA will have legal authorization to act on your behalf, therefore it is very important to select someone who is trustworthy and able to make sound decisions.
The format of a POA can take a variety of forms, and can cover a multitude of issues. For example, a financial POA can limit the agent's duties to paying bills and making limited choices in regard to financial matters. Or it can give full power to make any and all decisions, including the right to buy or sell real property, adjust investments or make gifts. A POA is a very flexible tool in estate planning, and should be carefully drafted according to the wishes of the principal.
In assigning a power of attorney, Maryland residents are not only adding a vital estate planning tool to their existing documents. Assigning these duties also opens up an opportunity to discuss your wishes with the people closest to you, especially the person who will assume the duties of POA. While many people avoid such conversations, they can actually help loved ones to know and understand the choices that the principal is making, and can go a long way toward ensuring that one's wishes are followed if and when the time comes for the POA to come into play.
Source: Investing Daily, "An Estate Plan Essential," Bob Carlson, Dec. 4, 2012