As you get older, you may start thinking about estate planning. This involves determining what happens to your property, belongings and finances. While estate planning can be difficult to think about, know that you’re setting yourself and your family up for success when it comes to making financial decisions and health care decisions. You can provide your family with a set pathway forward.
Understanding the difference between a conservatorship vs. a power of attorney will give you the information you need to plan your estate with confidence.
What Is a Power of Attorney?
As you plan your estate, you’ll likely hear the term power of attorney (POA). According to the American Bar Association, a power of attorney “gives one or more persons the power to act on your behalf.” This person will be referred to as your “attorney-in-fact.”
You can set the terms of a power of attorney to a specific activity. If you want to have someone take charge of your financial affairs, then you could choose a financial power of attorney. You can also choose the attorney-in-fact to be able to make business, financial and medical decisions.
This doesn’t mean as soon as you determine who has the power of attorney that the attorney-in-fact can make decisions for you. There’s a choice between having the POA start immediately or at the time of a certain event.
For example, if something happens and you’re no longer able to make decisions, the person with the power of attorney will have the authority to make those decisions. You can also revoke the power of attorney at any time.
Typically, choosing a trusted family member for this legal assignment can give you the peace of mind you want and need when planning your power of attorney.
General Power of Attorney vs. Durable Power of Attorney
A general power of attorney can act on your behalf when you are fit to make your own decisions. However, should something change and you are incapacitated, they no longer can make those decisions.
On the other hand, a durable power of attorney can act on your behalf when you cannot make decisions for yourself.
What Is a Conservatorship
A conservatorship is different from a power of attorney. A conservatorship occurs in the event that you’re no longer capable of taking care of your affairs and you are not able to choose someone to take care of them on your behalf. In this case, the court appoints a conservator to act on your behalf.
For a judge to grant a conservatorship, someone will need to file a petition for appointment of a conservator. This will include details on why the individual needs a conservatorship. A court investigator will look into the validity of the petition and whether the individual needs a conservator.
However, if you have already designated a power of attorney, your family will not have to go through the process of determining a conservator who will act on your behalf. The power of attorney will have your wishes and can act accordingly.
Estate Planning
Now that you know the difference between a power of attorney and a conservatorship, you can look into the parts of estate planning. This will determine what will happen to your assets in the event of your death. These assets include your finances, insurance, stocks, real estate and more.
There are three main components:
1. Durable Power of Attorney
While we’ve gone over this definition, it’s important to know that you may hear other terms for durable power of attorney. Others may refer to durable power of attorney as attorney for health care or medical power of attorney.
2. Wills and Living Wills
A will is a legal document that spells out how you want your property to be handled after your death. If you have children under age 18, you’ll also plan for how they will be cared for. A will is a way to put your last wishes on paper.
A living will is another type of legal document that details what kind of medical care you want in case you are not able to convey those wishes yourself. For example, a living will would go into effect if you were in a serious accident and your living will contained information on whether you do or do not want medical care regarding revival or for sustaining life.
3. Trusts and Donations
A trust is a financial agreement on how your financial assets are handled. When you put your money into trusts, they can help protect your assets from being taxed and can give you peace of mind that the people who you name in the trust will receive that money.
You can also set up charitable trusts or donations if you want to leave money for an organization like a charity.
While estate planning requires a lot of decisions and planning, you can help keep your wealth in the family and provide support for your family members in the future. Working with an estate attorney can give you the best chance of making sure your estate planning process goes smoothly.
Learn More About Estate Planning at Wyndemere
In your retirement years, it’s always good to know how to protect yourself and your assets, as well as look out for your care in the future. We invite you to contact us to learn more about how Wyndemere is helping seniors live their best lives.
We can answer any questions and connect you with local attorneys that can help with estate planning. Wyndemere is dedicated to providing seniors with peace of mind and security for the future.
