Most of our readers in Colorado know that for their estate plans to be truly comprehensive those plans must include more than just a will. A variety of other documents will be needed as well, and power of attorney documents can play a key role in any estate plan.
Power of attorney basics
The basic concept of a power of attorney document is fairly straightforward: The estate planner – known as the “principal” – gives another person the ability to make financial or healthcare decisions. The appointed person is known as the “attorney in fact,” although it should be pointed out that the person doesn’t actually have to be an attorney.
So, why should your estate plan include these documents? Well, for many people, these documents are in place just in case they become incapacitated in some way and, as a result, they are unable to relay their own decisions on financial or healthcare matters. That is why the person who is selected to be the attorney in fact is so important – that person must understand the principal’s wishes in certain circumstances. Communication is key in estate planning, so anyone who is appointed as an attorney in fact in a power of attorney document should probably know that they will play that role if the need arises.
Although the basics of power of attorney documents may seem pretty simple, the fact is that there are nuances to these documents and the extent of power they give. When Colorado residents are ready to put their comprehensive estate plans together, they’ll need to think carefully about how their power of attorney documents will be drafted.