An estate plan is essential for the proper distribution of assets according to someone's wishes. Estate planning can also help avoid a future family disaster down the road. Usually included in an estate plan are wills, trusts and a power of attorney. A power of attorney is one of the most crucial components for Minnesota grantors to have in a well-organized estate plan.
Some people might have the question: what is a power of attorney? A power of attorney is an instrument that outlines authority given by the grantor to another individual. Most of the time, the grantor gives authority to make financial and health care decisions on their behalf when they are no longer able to do so. This person given authority has a trusted responsibility to safeguard the grantor's finances and not do anything the grantor wouldn't normally do. The person with authority is allowed to act on the grantor's behalf as long as it's for his or her best interest.
The grantor can still make decisions, even if the power of attorney is not available at that time. Although the power of attorney is given a certain amount of authority, the grantor is still in charge and may terminate the individual at any time and for any reason. Furthermore, this form can be created without having to enter a courtroom. By not appointing someone as power of attorney, a grantor stands the risk of loss of protection and substantial loss of the estate following a death.
It's important to have a trusted individual act as power of attorney, such as a family member. They are given the opportunity to perform trusted tasks and do what the grantor would normally do if they were able to. There are different types of powers of attorney available to Minnesota grantors in estate planning. Learning about these documents can help individuals make the best financial decisions and execute a thorough estate plan.
Source: reflector.com, Financial health: Estate planning, No author, Jan. 18, 2014