How Does Power of Attorney Work in Colorado Estate Planning?
A Colorado estate plan can provide key forms of legal protection for a testator who drafts documents, as well as their beneficiaries. Estate planning paperwork can designate beneficiaries to inherit someone’s property and guardians to take care of someone’s dependent children if they die prematurely.
Many estate plans also include specific provisions for the protection of the testator drafting documents if they experience a major personal emergency. Powers of attorney are among the most useful documents integrated into an estate plan for someone’s protection while they age. Making the right choices on the three issues below pertaining to power of attorney paperwork can make a major difference for testators.
There are several different types of powers of attorney that people can add to their estate plans. Often, people talk about powers of attorney in the context of what the documents do. Some people want to put together medical powers of attorney empowering someone other than their spouse to handle their medical matters. Other people want financial powers of attorney granting someone the authority to manage their business, pay their bills or take care of their investments. Durable powers of attorney can also be useful, as they can protect someone from the possibility of long-term incapacitation by designating a person they trust to manage their affairs.
Who to Name as Agent
The agent or attorney-in-fact designated in power of attorney documents has the legal authority to handle certain matters on behalf of the testator. It is therefore very important to choose the right person to take on that role. Some people separate authority into several documents and choose different agents for each document. Others choose a professional fiduciary to act on their behalf instead of selecting a member of their family.
Which Restrictions to Impose on Legal Authority
Powers of attorney do not have to grant one individual total authority over someone else’s health care or finances. It is possible and even advisable to intentionally limit what authority someone’s agent has and when they can use that power. Some people, for example, limit powers of attorney by requiring that they remain incapacitated for a certain amount of time before someone can take action on their behalf. Including the right terms in power of attorney paperwork can have a major implication on someone’s comfort and protection when they are at their most vulnerable.
Thinking carefully about the terms to include in power of attorney paperwork, and seeking legal guidance accordingly, can make a major difference for a testator’s protection and peace of mind.
