You thought that certain estate planning tools such as powers of attorney were for older people, not millennials like you.
Yet when you were the victim of a vehicle crash, you realized your minor injuries could have been serious and you changed your opinion.
About powers of attorney
The two main forms of powers of attorney are the healthcare POA and the financial POA. In creating these powers, you appoint a trusted family member or friend to act as your agent in the event that you become incapacitated and cannot make your own medical or financial decisions. If such an emergency situation arises and you do not have these POAs in place, your family could face considerable expense and legal red tape to create a guardianship in order to act on your behalf.
Durable versus springing
A durable POA becomes effective as soon as you sign it. This means that the person you select as your agent now has the legal authority to act in your stead. He or she will maintain that authority even if you never become incapacitated. On the other hand, a springing POA only goes into effect at a predetermined time and for a particular reason. You have to specify the kind of event that would cause this kind of POA to become effective.
Was the car crash a blessing in disguise? After a will, powers of attorney for healthcare and finances are probably the most basic estate planning documents, but POAs are only legal if created by a principal who is mentally competent. As a millennial, you are wise to think about drafting your POAs well in advance of a time when dementia might become a factor in your life.