Simply having a power of attorney in place is not enough to ensure that all your affairs will be handled smoothly or completely. A power of attorney is an essential tool of estate planning, but it requires careful attention if you want it to function as fully as it could. If you only have the most basic power of attorney document in place, or your power of attorney wasn't drafted by a lawyer, there are likely important elements missing that could cause problems in the future.

Why Does Gifting Authority Matter?

For example, an effective power of attorney will include a provision allowing the agent to make gifts of your property or money. While this might sound frightening, like you're giving someone the right to give away everything you own, in fact this power is essential for Medicaid planning should you need to enter a nursing home. Gifting powers are also critical when planning to avoid estate and inheritance taxes. Boilerplate power of attorney documents often allow either no or limited provisions for agents to gift your assets in this manner.

What About Succession Or Tiebreakers?

There could be a circumstance in which your appointed agent is no longer able to carry out his or her duties. If your power of attorney document makes no allowance for that agent to appoint a successor, you could be in trouble. Similarly, in cases where two agents have been appointed and they disagree on something, there needs to be a provision whereby a tiebreaker can move things forward.

Are The Duties Clearly Outlined?

A power of attorney document doesn't mean much if the duties of the agent are not defined. An effective power of attorney document will spell out specific duties and procedures, so as to minimize confusion and potential conflict.

Can Your Agent Establish A Trust?

To be most effective, a power of attorney document will specifically allow for an agent to establish trusts on behalf of the principal. Without this power, the agent is limited in his or her ability to manage the principal's estate.

Strengthen Your Power Of Attorney

A toothless power of attorney document helps no one. We can help to craft a more effective document that clarifies and defines the parameters of your agent's duties and powers. To speak with a lawyer in our Reading office, call Leisawitz Heller at 610-816-0342 or reach out using our online form.