While there are several important considerations involved in putting together an estate plan, one of the most important considerations is comprehensiveness. When providing guidance for your loved ones, you do not want to leave any key questions unanswered. While you cannot predict the future, you can plan for it, and you can work with your Vineland estate planning attorney to ensure that your loved ones have the necessary guidance regardless of what the future may hold.
This is where powers of attorney come into play.
While everyone’s estate planning needs are unique to their individual circumstances, most comprehensive estate plans will include the same types of documents. Along with wills, trusts and advance directives, these documents include two different powers of attorney. Durable powers of attorney and general powers of attorney serve different purposes—and they are equally important for building a comprehensive estate plan that will provide peace of mind for you and your loved ones going forward.
Understanding the Role of a Power of Attorney in Your Estate Plan
Before we talk about the two different types of powers of attorney that are used for estate planning in New Jersey, we should first talk about powers of attorney in general. So what, exactly, is a power of attorney?
Simply put, a power of attorney is a legal document that authorizes someone else to make decisions on your behalf. This individual serves as your “attorney-in-fact,” though he or she does not need to have any legal training or experience. Most people select an adult child or another close family member to serve as their attorney-in-fact—and the key is to choose someone who you trust will make informed decisions with your best interests in mind.
While you will create your powers of attorney during the estate planning process, they will not become effective immediately. Instead, they will only become effective in the event that you become legally incapacitated (i.e., due to traumatic injury or a debilitating disease or cognitive condition). If you never become legally incapacitated, then your chosen attorney-in-fact will never need to step into the role and take responsibility for making decisions on your behalf.
Durable Powers of Attorney: Designating Someone to Make Healthcare Decisions on Your Behalf
As we mentioned above, there are two types of powers of attorney, each of which serves different purposes. The first is a “durable power of attorney.” These are also commonly referred to as “proxy directives” and “powers of attorney for healthcare.”
A durable power of attorney is used to designate someone to make healthcare decisions on your behalf should you be unable to do so due to incapacity. In addition to preparing a durable power of attorney, you can also prepare an advance directive (or “living will”). Here, you can provide direct instructions to your future healthcare providers regarding end-of-life care instead of assigning responsibility to someone else to make decisions on your behalf. Often, people appoint an attorney-in-fact to make decisions on their behalf before the need for end-of-life care, and they use an advance directive to provide specific guidance at the end of their lives so that their loved ones are not burdened with making decisions in this scenario.
With that said, you have the flexibility to prepare your estate plan according to your personal wishes—and what is right for someone else might not be right for you. When you sit down with an experienced Vineland estate planning attorney, your attorney will walk you through all of your options so that you can feel confident you are making informed decisions.
General Powers of Attorney: Designating Someone to Manage Your Finances
While a durable power of attorney focuses on healthcare decision-making, a “general power of attorney” focuses on financial management. Like a durable power of attorney, a general power of attorney also only becomes effective in the event of your incapacity.
Establishing a durable power of attorney ensures that someone you trust will be able to step in and manage your finances should you become unable to do so. You can choose the same individual to serve as your attorney-in-fact under both of your powers of attorney, or you can assign different responsibilities to different individuals. Once again, the key is to choose someone you trust, and when preparing your estate plan, you should talk to the individual (or individuals) you have chosen to ensure they are comfortable taking on the relevant responsibilities if necessary.
What If I Don’t Include Powers of Attorney in My Estate Plan?
What will happen if you don’t include powers of attorney in your estate plan? If you become incapacitated and you have not designated one or more attorneys-in-fact, your family will need to go through the process of having someone formally appointed to make decisions on your behalf. This can be both time-consuming and costly—and it will come at a time when prompt decision-making is required. So, while you may never need to rely on your powers of attorney (and hopefully you won’t), it is well worth putting them in place.
Can I Make Changes to My Powers of Attorney (Including Changing My Attorney-in-Fact)?
Once you have prepared an estate plan, can you change your powers of attorney in the future? The answer to this question is a clear “Yes.” You can modify your powers of attorney at any time as long as you are not legally incapacitated. As a result, there is no reason to wait to put your powers of attorney in place—and, if you change your mind about anything in the future, your Vineland estate planning attorney can help you make the necessary modifications.
Schedule an Initial Consultation with a Vineland Estate Planning Attorney Today
Do you have more questions about the estate planning process in New Jersey? If so, we invite you to get in touch. To schedule an initial consultation with an experienced Vineland estate planning attorney at Helmer, Conley & Kasselman, P.A., please call 877-435-6371 or request an appointment online today.