When it comes to estate planning, most people are well aware of the need to execute a will or create a trust to address the disposition of their assets. While this is undoubtedly true, it's important to remember that these instruments are just part of what can truly be called a comprehensive estate plan.
Indeed, those looking to make sure that they have everything covered in the event of their untimely demise or sudden incapacity will need to consider the execution of guardianships (if they have minor children), health care directives and, of course, powers of attorney.
In today's post, the first in a series, we'll start taking a closer look at the power of attorney, an estate planning document that many people might be unfamiliar with, but which can prove to be invaluable.
What exactly is a power of attorney?
In general, a power of attorney is a legally binding document in which a person -- referred to as the principal -- vests another person -- referred to as the agent -- with the authority to act on his or her behalf in legal and/or financial matters.
It's important to understand that a power of attorney can be drafted in such a way that the agent is permitted to perform a broad array of tasks from managing real property and overseeing bank accounts to paying taxes and operating a business. However, it can also be drafted in such a way that the agent's powers are incredibly limited, such that they are authorized to perform only one or two specific tasks.
What does "durability" have to do with powers of attorney?
In general, a durable power of attorney is one in which the powers granted to the agent remain effective in the event of the principal's incapacity or disability.
It's important to note state law dictates that any power of attorney created within our borders is presumed to durable unless expressly stated otherwise in the applicable document.
We'll continue this important discussion in future posts, discussing more about the fiduciary duties of the agent and the requirements for executing a power of attorney in Utah.
If you would like to learn more about executing a power of attorney or creating an estate plan, consider speaking with an experienced legal professional.