When you first write your will, you want to leave your loved ones with as much of your hard-earned assets as possible. But you also know that much will change between now and the time of your death. How do you make sure your wishes are carried out, even if you’re unsure what your wishes are? With a Powers of Appointment, you can assign someone the right to make those decisions after you are gone.
When writing your will or trust, it’s known that things will change after you’re gone. The Powers of Appointment (POA) gives a named person the authority to determine how the trust will be distributed after you pass away. If you named your spouse to have a POA, they could revise how your money and assets are handled and can change the beneficiaries of your trust.
You can see how this can either be good or bad. Choosing to give someone Powers of Appointment is a huge responsibility.
Let’s say that before you die, one of your children wins the lottery and is suddenly a multi-millionaire. When you pass, your spouse (who you named to have Powers of Appointment) decides that your other kids need the money more than the lottery winner. With the POA, your spouse can direct the funds to the kids who need it more rather than have your estate split equally among them.
Adding a Powers of Appointment provides flexibility to your estate plan.
We suggest you review and update your estate plan every 3-5 years. But this doesn’t always happen. You could write your will, then pass away 40 years later without revisions. You could have acquired many assets or debt during this time. The person you have named to have POA can now decide the best way to handle your estate.
A Powers of Appointment can be beneficial if:
Establishing Powers of Appointment can be tricky. It is best to work with an estate planning attorney knowledgeable in the POA to ensure you minimize the tax consequences and maximize the legal benefits of this addition.
We can explain the good and bad points of a Powers of Appointment and help determine if it is right for you. Talk to a qualified attorney in the Chicago area, and contact the Estate & Probate Legal Group at 630-864-5835.
AREAS WE SERVE: DuPage, Kane, Lake and Will counties.