Life is unpredictable. There is no knowing when a person becomes ill and unable to handle the financial and legal affairs. This is where establishing a power of attorney proves invaluable. Unfortunately, not many people are aware of the role of power of attorney in times of duress.
In this article, we will explain what is meant by power of attorney, and also how it can help you in safeguarding your legal and financial interests.
What is Meant by a Power of Attorney?
A power of attorney is established by creating a legal document mentioning the name of a person or company that can make decisions on your behalf. Establishing a power of attorney ensures that someone competent looks after your affairs when you are away or become ill.
By establishing a power of attorney, your financial and legal affairs will be looked after by a professional and competent agent. You can specify specific instructions to the agent in the power of attorney document. Your agent will be bound to carry on your wishes while handling your affairs.
Types of Power of Attorney
There are various types of power of attorney. All of them have the prime purpose of safeguarding financial and legal interests of the principal. Here are the four basic types of power of attorney that you can establish based on your requirements.
- Non-durable Power of Attorney — Provides broad powers to the agent to act on your behalf. It ceases when you become incapacitated or pass away.
- Durable Power of Attorney — Also, provides broad powers to the agent to act on your behalf until you pass away. However, it is different than durable power of attorney in that it remains effective when you become physically or mentally incapacitated.
- Limited Power of Attorney — Provides limited powers to the agent to act on your behalf. It is established to handle certain affairs such as managing medical, tax-related or legal matters. Note that if you assign someone as your tax power of attorney, you need to fill the IRS Form 2848, Power of Attorney and Declaration of Representative.
- Springing Power of Attorney — Springing power of attorney becomes effective only when a special event is triggered. It can be triggered when the principal is out of the country or becomes ill. Also, it can durable or non-durable depending on the requirements of the principal.
Why Establish a Power of Attorney?
The benefits of establishing a power of attorney are many. It ensures a peace of mind in knowing that your assets and your family will be protected in case you become handicapped. It is a practical way to manage your estate and other resources when the need arises. Appointing an agent ensures that someone competent looks after your affairs when something happens to you or you are away due to other commitments.
Make sure that you select an experienced attorney when establishing a power of attorney in Illinois. A skilled and competent attorney will make sure that the power of attorney is properly notarized and fulfills all local legal requirements.
To get in touch with an experienced lawyer in Chicago to establish a power of attorney, you can contact our Chicago estate planning attorneys. We can connect you with a qualified and experienced local attorney who can help you with all types of legal matters.