As you begin the estate planning process, you must consider who could manage your affairs in the event you become disabled, ill or incapacitated. While you may be hale now, you will want to account for the possibility that your health may one day decline. Without a plan in place, your loved ones may endure chaos, conflict and confusion as they scramble to set one forth. To avoid this outcome, you must draft a power of attorney.
How a power of attorney works
A power of attorney is a legal document that vests an agent – usually a family member – to act with authority over your affairs. This document will be useful if you fall ill or become disabled in the future and can no longer manage these yourself.
You will want to make sure that you choose the right type of power of attorney for your needs, since several different types exist. These are:
- General power of attorney: Grants an agent the power to work on your behalf on all property and financial matters.
- Limited power of attorney: Grants an agent the power to work on your behalf on specific property and financial matters, sometimes for a specific time frame.
- Health care power of attorney: Grants an agent the power to make health care decisions for you if you can no longer do so yourself.
All general power of attorney documents drafted since January 2018 are considered durable in North Carolina. This means that they will remain effective in the event you become mentally incapacitated, unless you specify otherwise. Yet, if you draft a health care power of attorney, it could lapse in this case. To prevent this outcome, you will need to add a provision to it that makes it durable.
Alternatively, you may want to include a provision in your power of attorney document that makes it springing. This means it will go into effect only if you become incapacitated and that you will remain in control over your affairs until then.
Each state has its own requirements for drafting a power of attorney document. You will want to consult an estate planning attorney to make sure yours is valid and binding in North Carolina.