Powers of attorney are important parts of an estate plan, but people in Louisiana should be aware of some common misconceptions about them. One myth is that a power of attorney is a uniform document that can be used from state to state. This is not the case; some states may not even recognize a power of attorney from another state.
Powers of attorney are created to appoint someone to manage a person’s finances and healthcare decisions if the person is unable to do so. A durable power of attorney for finances is a separate document from the healthcare power of attorney. Powers of attorney must be prepared and signed while a person still has the mental capacity to do so. They remain valid if a person becomes mentally incapable as long as the documents were signed before this happened.
Older people are not the only ones who need powers of attorney. Illness or an accident can happen to anyone at any time. As important as they are, powers of attorney cannot be used as a substitute for wills and trusts. Their power ends when a person dies, and a will must appoint someone as executor for the estate.
Powers of attorney are fundamental documents in an estate plan. Even if a person has few assets or beneficiaries, having someone who can tell doctors a person’s medical wishes or who can pay bills on a person’s behalf can be critical. An attorney may be able to assist a person in creating an estate plan that includes these and other necessary documents. The other basic document needed is a will. However, depending on the person’s situation and assets, a number of other documents may be needed. For example, a trust can serve many purposes including protecting assets from creditors and planning how distributions will be made to beneficiaries.