An estate plan gives individuals the ability to designate the allocation of their property and person should they pass away or become incapacitated. Whether an individual has a few assets or a large estate, a plan may be beneficial and avoid confusion for the family during a difficult time.
If you are creating an estate plan or revising a current one, having a power of attorney in place may be helpful. Before you make your decision, there are a few factors to consider:
Different states acknowledge a few types of POAs. In the state of New Jersey, there are four types to choose from:
Spring and limited POAs are seen as types of durable POAs. The difference between a general and durable power of attorney is the timeframe; a general power of attorney is only valid while an estate holder is competent, while a durable power of attorney becomes valid once an individual becomes incapacitated. It is important individuals understand the duties and stipulations of each type so they may make the best determination.
New Jersey law provides the stipulations for the assignment and fulfillment of power of attorney duties. It is important testators become familiar with these stipulations and that they select a power of attorney who meets the set standards. Otherwise, the courts may find the designation to be void.
The POA is someone who will act in the place of the designating party, sometimes making critical decisions. Therefore, it is important they select trustworthy individuals with the capacity to fulfill the duties of the position. Estate holders should look to designate individuals who are honest, loyal and respectful, among other things. For this reason, individuals do often choose family members, but that does not have to be the case for every situation.
These are just a few key factors to consider before selecting a power of attorney. Before you make a decision, take some time to consider your options and consider consulting a knowledgeable attorney.