What is a Power of Attorney? | Tacoma Estate Planning Lawyer
Estate planning may not be an exciting dinner party topic to discuss with family or friends, and understandably so. However, it’s an important conversation you must have to rightfully protect your loved ones and assets after you’ve passed on. The fact is, it’s never too early to start thinking about your estate plan. Here at Law Offices of David Smith, we strive to help our current and prospective clients better understand estate planning, allowing them to make appropriate decisions regarding the assets that they have worked so hard for.
One of the key aspects of an estate plan is a power of attorney. A power of attorney (POA) is a highly customizable document that allows you (otherwise known as the “principal”) to grant someone (known as the “agent” or “attorney in fact”) to make decisions on your behalf under certain circumstances. Powers of attorney documents can be separated by purpose or duration. For example, one document may appoint an agent to make financial decisions, while another document appoints a different agent to make medical decisions. However, depending on how they are composed, an agent can have granted permission to make both financial and medical decisions.
Having a well-drafted and carefully-worded power of attorney document in place as a part of your estate plan allows your agent to immediately and efficiently step-in without the need for court involvement. Without a power of attorney in place, your family or loved ones will most likely have to undergo a complex and cumbersome court process in order to properly manage your assets. You may revoke or terminate your power of attorney at any time through a written notice to your agent. In addition, power of attorney will automatically expire upon your passing.
There are several types of powers of attorney to consider for your Washington estate plan. Here is a brief overview of the three main types we commonly see:
Conventional power of attorney: A conventional power of attorney goes into effect when the document is signed and ends when that person becomes incapacitated. The agent may be limited to a certain task or given more general permissions.
Springing power of attorney: A springing power of attorneys goes in effect after a specific event occurs, as specified in the document. In most cases, a springing power of attorney will become effective if you become mentally or physically unable to make financial, medical, or property decisions.
Durable power of attorney: A durable power of attorney is the most comprehensive form and can last your entire lifetime, remaining in effect after you become incapacitated. Your agent will have the permission to manage all your affairs after your incapacitation without the need for court involvement.
Lawmakers in the state of Washington recently passed a bill enacting the Uniform Power of Attorney Act (SB 5635), effective January 1, 2017. While existing power of attorney documents will remain valid, all new documents will need to comply with the new requirements of the law. For more information on changes to the bill, you can take a look at Final Bill Report by the Washington State Legislature.
If you would like to find out more about powers of attorney or establishing a comprehensive and secure estate plan, contact Law Offices of David Smith. During a complimentary consultation, our dedicated and knowledgeable team will take a look at your specific and unique situation and provide expert legal guidance on your best course of action.