Who would make important decisions for you when you can’t make them on your own? These thoughts deserve careful consideration when planning for the future.
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The Power to Act On Your Behalf
A power of attorney (POA) is a legal document giving a person the power to act on another person's behalf. This appointed person, the agent, (formally called an “attorney-in-fact”) is most commonly used in cases where an illness or injury prevents the person from making financial and healthcare-related decisions.
There are differing types of POAs for separate circumstances. Briefly, some of them are:
- A general power of attorney appoints an agent to act on behalf of the person in all matters, as allowed by the state and stated in the document. These matters may include handling bank accounts, signing checks, selling property, and filing taxes. This document becomes invalid upon the incapacity of the creator.
- A limited power of attorney gives the agent the power to act in more specific circumstances – for example, the agent under a limited power of attorney may only be allowed to manage a person's specific bank account or sign for a specific transaction, and for a limited time if necessary.
- A durable general power of attorney appoints an agent to act on behalf of the person in all matters, as allowed by the state and stated in the document. The “durable” portion of this document means the document is valid through incapacity.
- A healthcare power of attorney, as the name suggests, appoints an agent to make health-related decisions on behalf of the affected person.
The power of attorney can become active immediately or upon incapacity. However, it's important to note that it's only active while you're alive, and terminates in the event of your death. Like a trustee or executor, appointing this person deserves careful thought and consideration. If you trust this person and they've proven themselves to be sound decision-makers with excellent judgment, they're probably a good candidate.
Contact an attorney who specializes in estate planning in your state to get started. Remember: Specific laws governing power of attorney can vary from state to state.
Questions?
Reach out to one of our professionals at BECU Trust Services. We can answer any questions about the process and refer you to an attorney to get started. Contact BECU Trust Services at 206-812-5176, or becutrust@becu.org.
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BECU Trust Services is a trade name used by Members® Trust Company under license from BECU. Trust services are provided by Members® Trust Company, a federal thrift regulated by the Office of the Comptroller of the Currency. This is for informational purposes only and is not intended to provide legal or tax advice regarding your situation. For legal or tax advice, please consult your attorney and/or accountant. Trust products not federally insured, not subject to credit union or affiliate guarantee, and may lose value.