Power of Attorney vs. Representation AgreementsFebruary 28, 2023
If you are creating a will or completing other estate planning tasks, you have likely heard about power of attorney and representation agreements. While your will is created to outline what will happen after you pass away, these two documents are used if you become incapacitated or otherwise unable to make decisions on your own while you are alive. While there are some similarities between each document, it is important for every will-maker to understand the differences between them. That is why the estate and personal planning experts at Sidhu & Associates have compiled some information to compare power of attorney vs. representation agreements to help you determine which option is best for your situation and wishes.
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What is Power of Attorney?
A power of attorney is a written legal document that is used to appoint an individual to manage your finical and legal affairs while you are still alive. This individual can be a parent, spouse, child, or close friend. A power of attorney can be general, enduring, or limited based on your situation and your wishes. While a power of attorney is highly valuable for every individual, they are especially useful for individuals that own a business with employees or those that have many dependents.
What is a Representation Agreement?
A representation agreement is a written legal document that is used to appoint an individual to make personal and health-related decisions on your behalf while you are still alive. These documents are commonly used in situations involving ailing family members, aging parents or loved ones, and individuals facing a serious medical procedure. Representation agreements are important because they ensure that decisions can be made in your best interest and according to your preferences when you are unable to express those wishes yourself.
How do These Documents Differ?
While both documents are valuable estate planning tools, they are used for different purposes. To summarize, a power of attorney allows an individual to handle financial or legal affairs on your behalf while a representation agreement allows an individual to handle personal or health-related decisions on your behalf. Since each document grants different permissions, most testators will use both documents when planning for their estate to ensure that every scenario is covered. Regardless of the document you are completing, it is crucial to choose an individual you can trust to understand your wishes and carry them out on your behalf.
To learn more about wills, estates, and personal planning, get in touch with the experts at Sidhu & Associates. We can be reached through our online contact form and will be happy to answer any questions you may have.