It is never too late to take personal stock of major life decisions. These decisions encompass who will take care of my legal and financial decisions if I cannot express them, who will make health care decisions for me if I cannot express them, who will be a recipient of my financial bounty upon my death. Rest assured that there are three documents that address each of these decisions respectively: Durable General Power of Attorney, Durable Health Care Power of Attorney and a Will.
First, a Durable General Power of Attorney (or POA) is a document that effectively assigns your decision making powers, relating to legal and financial issues, to another person. The term “durable” means that this document stays valid even after you become incapacitated. There are a myriad of powers you may want to bestow to your agent. You may bestow broad powers or you may bestow very limited, specific powers. For example, you may want to allow your agent to make gifts of your assets to family members; however, you may not want your agent to change beneficiary designations on your financial accounts. You may name a sole agent or joint agents, as well as alternate agents, in the event your primary agent is unwilling or unavailable to act. A Durable General Power of Attorney is effective after you, the principal, and your agent sign the document.
Second, a Durable Health Care Power of Attorney operates the same way as a General Durable Power of Attorney, where you assign decision making powers to another person (your agent). The difference between a Durable Health Care Power of Attorney, and a Durable General Power of Attorney, is that the former specifically concerns health care decisions, if you are unable to make them. What type of medical treatment do I want? Do I want artificially administered food or water if I am unable to take them by conventional means? These questions are laid out in advance, directing your agent to communicate such decisions on your behalf. A Health Care Power of Attorney is effective only when the principal (you) suffers from an end-stage medical condition or are permanently unconscious, rendering you incapable of communicating your own medical decisions.
Finally, a Will, differs from the above documents because it is effective only upon your death. The primary purpose of a Will is to give your assets that pass under your Will to the individuals or charities of your choice. Non-probate assets, or assets that do not pass under your Will, are those that are governed by beneficiary designations that make. For example, when you open an IRA you typically are asked to designate beneficiaries, or recipients, of that asset upon your death.
Your “estate” includes all assets and debts you own at the time of your death. A Will may also address who will care for your minor children upon your death (guardian) and who will manage assets held in trust for your children under your Will (trustee). A Will can be as specific, or as general, as you want it to be. Altogether, a Will is meant to make clear to your loved ones what is to be done with your estate after your death.
Here, at Fries Law Office, we have multiple decades of experience to assist you in your estate document needs. Please contact us if you need direction and assistance with any of the above. Remember that major life decisions can be addressed well in advance of a life-altering event.