Powers of Attorney and Estate Planning

 Posted on November 30, 2014 in Estate Planning

Thinking about the future and what can happen in case of illness, disability, or incapacity is not something that everyone likes to do. However, planning for these situations can be a great way to be prepared and to ensure that your wishes for your future finances and health care are honored. One way to accomplish this in Illinois is through the creation of a power of attorney (POA). A POA can be beneficial in most situations. However, it is limited in terms of planning for situations after death. For after death planning, there are other estate planning methods that are better suited to accomplish that long term goal.

What is a Power of Attorney? 

A power of attorney is a legal document authorizing an arrangement between two people in which one person, known as a principal, appoints an agent and authorizes him or her to make property, financial, personal, and health care decisions for the principal. The agent who acts on behalf of the principal in this arrangement does not have to be an attorney.

In designating an agent for a POA, the principal can outline all the duties the agent will have, as well as the effective dates of the POA. For many people, the POA does not need to become effective until you are disabled or incapacitated. If the document does not state a termination date, the agent will continue to act in his or her role until the death of the principal, at which point the power granted to the agent ends as the POA terminates.

The termination of an agent’s power upon the death of a principal means that the agent has no further authority to control what happens to the principal’s estate when the principal dies. This is why it is important for a principal to consider other estate planning means, such as the creation of a trust or will, to ensure that a principal’s wishes continue to be honored after death. An agent cannot make changes or even hold original wills or trust documents; only the principal can make changes.

Trusts are especially useful if you have minor children and property that you would like to pass to them. Trusts and wills can also be used together; you can include a provision in the will allowing for any property not specifically left to anyone else to go into the trust for trust beneficiaries. An attorney can explain which estate planning methods would work best for your situation.

Contact an Illinois Estate Planning Attorney

If you want to ensure that your family will be taken care of, or ensure that you have a solid plan in place for how your property will be distributed in the event of your death, you should talk to a Kane County estate planning attorney today. Contact the experienced attorneys at Law Office of James F. White, P.C. for a free consultation. We provide most estate planning services for a flat fee, and include in that price POAs for all of our estate planning clients.