A power of attorney functions as an important tool in estate planning. Through the careful assembly of a power of attorney, you can help a loved one manage their affairs if they become incapacitated.   

A power of attorney grants a selected individual the ability to make decisions on behalf of another person. The individual who receives this authority, known as an agent, must then act in the best interests of the subject, known as the principal. 

The exact degree of authority that the agent receives depends on the scope of the power of attorney. The agent may have authority over decisions related to the principal's financial situation, contracts, property, or healthcare. 

Typically, a power of attorney becomes necessary because of the incapacitation of the principal. For example, if the principal can no longer make sound decisions due to dementia or another disability, then the agent will assume those duties. 

Several types of power of attorney exist, including durable, non-durable, and springing variants. Depending on the circumstances, one or more may offer the best solution for your estate plan:

• Durable power of attorney. This power of attorney takes effect immediately after the signing of all documents, often because of medical incapacitation of the principal.
• Non-durable power of attorney. With a non-durable power of attorney, the power of attorney ends when the principal becomes incapacitated. 
• Springing power of attorney. A springing power of attorney, on the other hand, comes into effect as soon as the principal becomes incapacitated. 

A durable power of attorney makes the most sense when planning for the long-term incapacitation of the principal and when the agent needs control of the principal's finances at the time of signing. A springing power of attorney makes more sense for situations in which the principal wishes to hedge against the risk of incapacitation. 

An experienced estate planning attorney can help you to make the best possible choice about the type of power of attorney that would make the most sense for your specific situation.

Creating an effective power of attorney solution involves determining which facets of the principal's affairs the agent should have authority over. Some power of attorney options grant the agent solely the ability to manage the financial affairs of the principal, while other powers of attorney give the agent the power to make medical decisions on behalf of the principal in the event of incapacitation. 

Items of consideration when drafting a power of attorney include:

• The time at which the power of attorney should take effect. This aspect involves the distinction between non-durable, durable, and springing powers of attorney.
• The scope of the power of attorney. The powers granted to the agent require special consideration, including whether the agent should manage both financial and medical affairs.
• Periodic review. All estate planning documents require review periodically to update them for unforeseen changes in the status of the agent or principal.  

A casual search on the Internet reveals many preformatted templates for power of attorney. However, you should not make use of a do-it-yourself process for such a critical life decision. An incorrectly drafted power of attorney can result in significant challenges for both the principal and the agent. 

At Kisner Law Firm, we specialize in providing estate planning services for our clients in the San Francisco Bay Area. We look forward to working with you on your estate planning needs.